Today the ECB decided to cut the policy rate in 25PB, so the deposit rate now yields 2.50%. The most important part of the decision was its evaluation of the restrictivity of its monetary policy position. The ECB now considers that monetary policy ‘is becoming significantly less restrictive’, which means that it evaluates that the current level of rates is closer to the terminal rate than previously, Danske Bank Piet Haines Christiann and Rune Thyge Johansen analyzes report.
Disinflation continues on their way and the economy faces challenges
“Given the strong uncertainty, Lagarde clearly guided that the data dependent approach is probably higher than ever, so there was no guidance or commitment for a cut in April. Today’s decision was a consensus, without opponents, but Holzmann refrained.”
“Personnel projections reduced growth forecast by 2025 to 0.9% year -on -year (lowering 1.1%) and by 2026 to 1.2% year -on -year (lowering 1.4%). Inflation was reviewed upward in 2025 to 2.3% from 2.1% due to energy prices, but as future have decreased since then, we do not interpret that as a hard line sign underlying inflation that was reviewed down 2.2% from 2.3%. “
“The markets have revalued the expectations of the ECB in recent days, no less after the change in the German fiscal position and the expenses package. There are currently almost two additional cuts of the ECB until the end of the year valued, which is approximately one cut less than earlier this week.”
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
