UniCredit: Central banks will ignore short-term turbulence, Fed expected to cut rates once this year

Golden Ten Data, March 6 – Marco Valli and Daniel Vernazza, chief economists at the UniCredit Bank Investment Research Institute, stated in a report that Iran's military actions are expected to last for several weeks, allowing central banks to temporarily ignore short-term volatility, after which tensions and energy supply disruptions should ease. They said: "In our baseline scenario, the Federal Reserve is still expected to cut rates only once this year, while the European Central Bank will keep rates unchanged until 2027." The two chief economists further noted that the risks facing the European Central Bank this year have shifted from additional monetary easing to the possibility of tightening policy earlier than expected.