Core Viewpoint - The European Central Bank (ECB) has entered a new phase of monetary policy, focusing on monitoring the economy rather than actively intervening to change its direction, as inflation is currently at the target level of 2% [1][2] Group 1: Monetary Policy Stance - ECB officials are inclined to maintain the current interest rates after pausing further rate cuts in July, with many decision-makers suggesting no changes in the upcoming meeting [1][3] - Kazaks indicated that a further rate cut of 25 basis points would not significantly impact the economy, viewing it more as an insurance measure rather than a necessity [5] - The ECB's current situation is perceived as stable, with Kazaks stating that the existing economic data does not warrant immediate action [1][4] Group 2: Economic Outlook - Despite some uncertainties in business investment due to tariffs on exports, surveys indicate a recovery in the European manufacturing sector, which has struggled for over three years [1] - Wage growth is slowing as expected, which bolsters confidence that mid-term inflation will stabilize at 2% [1] - The ECB's forecast predicts inflation will dip slightly below the target early next year but is expected to rebound to 2% by 2027 [2]

Core Viewpoint - Franklin Templeton suggests that the European Central Bank (ECB) will consider interest rate hikes by the end of this year due to potential economic growth driven by defense spending [1] Group 1: Economic Outlook - David Zahn, head of the European fixed income department, indicates that by 2026, the economic situation in Europe will be very clear, with low inflation rates and strong economic growth [1] - This perspective contrasts with current market expectations, where traders anticipate three more rate cuts from the ECB this year, each by 25 basis points [1] Group 2: Interest Rate Projections - Traders expect the deposit rate to remain at 1.5% until mid-next year following the anticipated rate cuts [1]