European Central Bank minutes for October meeting: "No rush to cut interest rates" is the consensus, current wait-and-see approach is the best strategy.

The European Central Bank (ECB) minutes from the meeting on October 29-30 were released on Thursday, showing that ECB decision-makers were not in a hurry to cut interest rates. The reason being that the level of uncertainty was still very high at the time, and there may not be a need to further loosen monetary policy. During the meeting, the ECB decided to keep interest rates unchanged and stated that the current policy was in a "good state". This was because the economy was showing some resilience, and inflation was firmly at the target level. This situation further strengthened investor confidence, making them believe that there would not be any more rate cuts this year. Currently, the market believes there is only about a one-third chance that the ECB will further loosen monetary policy in 2026. The ECB stated in the October meeting minutes: "Continuing to maintain a wait-and-see stance still has considerable option value. At present, the existing policy rate level should be considered sufficiently robust to deal with shocks." Some officials even believe that the rate-cutting cycle may have come to an end. The ECB added: "There are views that, given the favorable outlook is likely to persist unless risks materialize, the rate-cutting cycle may well have come to an end." Since the meeting, economic data that has been released has further solidified market bets. A series of indicators show that the Eurozone economy is still growing, although at a slower pace; meanwhile, the inflation rate is firmly anchored near the ECB's target level of 2%. However, there is a possibility that inflation could fall below the target level next year due to the impact of the significant drop in energy prices. Discussions about rate cuts may heat up again in that case. Although the ECB traditionally has a tendency to overlook inflation fluctuations caused by energy price volatility, some board members have issued warnings that if inflation continues to remain below the target level, it could likely drag down inflation expectations and lead to long-term sluggish price growth.