Report: Lack of fiscal consolidation may limit the impact of European Central Bank interest rate cuts.

Natixis IM Solutions' Romain Aumond said in a report that a conservative interpretation of the European Central Bank's symmetric inflation target will continue to limit the impact of the interest rate cuts implemented over the past year and a half on the long end of the yield curve. The strategist cited Germany and France's expected deficits in 2026, as well as a general lack of fiscal consolidation in the medium term. He said, "The ECB seems unwilling to acknowledge the crowding-out effect that public spending will have on private demand in the coming years." In line with the market, Natixis IM Solutions expects the European Central Bank to maintain interest rates unchanged later on Thursday.