How far is the Interest Rate from the neutral level? Research from the European Central Bank suggests two interest rate cuts.

On February 7, economists at Europe's Central Bank said that the neutral Intrerest Rate could be between 1.75% and 2.25%. This means that the deposit Intrerest Rate may be lowered two more times, by 25 basis points each, to reach the upper limit of the neutral Intrerest Rate range. The current Intrerest Rate for deposits with Central Bank Europe is 2.75%. Investors and most analysts believe that the Intrerest Rate will stabilize at the midpoint of the 2% range. The concept of a neutral Intrerest Rate may help determine when to end the rate cut. However, the researchers caution against relying too heavily on the neutral Intrerest Rate. While these estimates "provide complementary information for monetary policy decisions and facilitate communication about monetary policy positions, they cannot be considered as mechanical indicators for measuring appropriate monetary policy at any point in time," the economist wrote.