ECB Sticks to Steady Rates Plan as Morgan Stanley Pushes Back Cut Forecast

European Central Bank policymakers intend to leave borrowing costs unchanged for the time being, signaling that a recently concluded trade agreement will not prompt an earlier shift in monetary policy. Officials reiterated their commitment to a steady-rates path, indicating they will take additional time to gauge the accord’s impact on inflation and growth before considering adjustments. Investment bank Morgan Stanley updated its outlook in response to the ECB’s stance, moving its projected timeline for the first rate reduction to December, followed by another cut in March. The firm had previously anticipated cuts in September and December. The revision underscores a broader market view that the ECB is prepared to wait several more months before beginning any easing cycle.