BofA Sees ECB Rate Cuts Resuming in Second Half of 2027

Bank of America (BofA) has reaffirmed its forecast that the European Central Bank (ECB) will resume interest rate cuts in the second half of 2027. According to BofA, quarterly reductions are expected in September and December, with the deposit rate projected to fall below 2% by 2028.

The bank attributes this outlook to chronic demand insufficiency and tight monetary policy, which it believes will eventually lead to an inflation undershoot. This trend is similar to what was observed in early 2026, when the eurozone began moving toward lower inflation.