Morgan Stanley: The European Central Bank has further room to cut interest rates, and German bond yields may be 2.45% by the end of next year.

[Morgan Stanley: The European Central Bank has further room to lower interest rates, and German bond yields may be 2.45% by the end of next year] Morgan Stanley stated that it expects the European Central Bank to further cut interest rates in the first half of next year. By mid-next year, the policy rate will be lowered from the current 2.00% to 1.50% and maintained at that level. Strategists pointed out: “Weak economic growth, inflation below expectations, coupled with limited fiscal stimulus, all drive the European Central Bank to further ease.” Against this backdrop, Morgan Stanley expects the 10-year German bond yield to be around 2.45% by the end of 2026. According to LSEG data, the money market expects the European Central Bank to cut interest rates by nearly 10 basis points in June 2026. ( Jin10 )