Economic news today showed a slowdown in Eurozone consumer prices that may allow the European Central Bank (ECB) to pause its interest rate hiking campaign. Eurozone Sep CPI eased to +4.3% y/y from +5.2% y/y in Aug, better than expectations of +4.5% y/y and the slowest pace of increase in almost two years. Also, Sep core CPI eased to +4.5% y/y from +5.2% y/y in Aug, better than expectations of +4.8% y/y and the slowest pace of increase in 13 months.
After raising interest rates for ten consecutive meetings since July 2022 that pushed the deposit rate to 4.0%, today’s welcome inflation news could finally prompt the ECB to pause its rate hikes. Commerzbank AG said today that “The ECB is unlikely to raise rates any further.” Also, ECB Governing Council member Kazaks said, "Interest rates will probably remain steady for an extended period. However, if inflation doesn't go down, then there could be a small increase."
