The European Central Bank closed the month of January by lowering key interest rates another 25 basis points, bringing rates to 2.75% after a series of nine cuts since June 2024. Recent lending data finally may be beginning to validate the ECB’s concerted efforts to stimulate growth.
While not yet a credit boom, bank lending data in Europe has been cautiously optimistic since the ECB started its easing cycle. Overall, it is reasonable to expect better cyclical growth in Europe given the return to a more normal run rate in business and consumer lending. However, tariffs and geopolitics remain significant threats. We will be watching closely for any trade or other developments that could materially drag on Europe’s nascent signs of growth.
Paul Mielczarski
Head of Global Macro Strategy & Portfolio Manager
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