The Federation of German Banks (BdB) today said the European Central Bank was likely to keep interest rates on hold for weeks to come.
The federation said in its January monthly economic outlook that neither the overshoot of the ECB's two per cent inflation threshold nor money supply growth justified speculation about a near-term ECB interest rate cut.
BdB also said the slowdown in euro zone economic growth was far less pronounced than in the United States, where fears of a hard landing prompted the Federal Reserve to cut rates by half a point at the start of this month.
"Against this background it is very likely that the ECB will keep its interest rates unchanged in the coming weeks. A policy of a 'steady hand' could calm down the nervous financial markets," the federation said.
The ECB governing council is widely expected to keep rates unchanged at its regular fortnightly meeting tomorrow.