09:11 AM EST, 12/12/2024 (MT Newswires) -- The European Central Bank reduced its key rates by 25 basis points on Thursday as expected, easing the monetary policy for the final time this year.

"This ECB easing cycle has further to go," said Mark Wall, chief European economist at Deutsche Bank. Earlier Thursday the ECB delivered the fourth quarter-point rate cut of this easing cycle at the December meeting and the second back-to-back cut.

More importantly, the door has been opened more clearly to further cuts, noted Wall. The ECB continued to describe current financing conditions as tight but dropped the reference to needing to keep policy sufficiently restrictive for as long as necessary.

This combination signals an easing bias, according to the bank's economist. For a market that has been pricing the chances of a sub-neutral terminal rate in 2025, Thursday's ECB decision will feel like "an endorsement."