The European Central Bank (ECB) is expected to lower interest rates for the sixth consecutive time next week, as it strives to support an economy facing numerous challenges beyond its control. The move follows four years of efforts to curb inflation by increasing the key deposit rate to a record 4 percent.
Since June, the ECB has gradually reduced its monetary policy stance, allowing the economy to pick up steam again. The upcoming rate cut will bring the deposit rate down to 2.5 percent, providing a boost to consumer spending and business investment.
However, the real test for ECB President Christine Lagarde comes after next week’s decision. With U.S. President Donald Trump’s unpredictable rhetoric and actions, creating uncertainty in global markets, it is challenging for the ECB to provide clear guidance on interest rate expectations for the rest of the year.
Source: https://www.politico.eu/article/ecb-set-to-cut-interest-rates-again-as-inflation-takes-a-back-seat-to-trump