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14th Jun 2022 00:10Eurozone, Daily Monitor

The neutral rate in the EZ is falling over time; it was likely negative immediately after the financial crisis.

We estimate the long-run neutral real rate to be 0.7% in the EZ, but the ECB policy rate won’t get that far.

We see the terminal ECB rate at 1.2-to-1.3%, 0.7-to- 0.6pp below current market-pricing.

core inflation deposit rate ECB ECB deposit rate ecb policy euro euro area fed gdp growth inflation forecast interest rates monetary policy negative rates October output gap policy policy rates q1 real interest rates stock prices us

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Keywords for: What are the Neutral and Terminal Rates in the Eurozone

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