Inflation in the eurozone fell below the European Central Bank's target for the first time in three years in September, leading to more significant expectations for interest rate cuts.
With inflation dropping to 1.8%, the likelihood of a rate cut at the ECB's upcoming meeting exceeded 90%, reflecting a more accommodating monetary policy from the central bank.
Frederik Ducrozet notes that each data release points to policy rates being too restrictive in the euro area, indicating the need for adjustments sooner rather than later.
ECB President Christine Lagarde expressed confidence that inflation would return to target soon, suggesting a cautious yet optimistic approach as policymakers assess the economic landscape.
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