ECB Cuts Interest Rates, Keeps Further Easing On The Table

The European Central Bank (ECB) cut interest rates as expected and signaled that further easing remains a possibility, maintaining its stance that inflation in the eurozone is increasingly under control despite concerns about global trade, Francesco Canepa reported for Reuters.

The ECB’s fifth rate cut since June, which had been widely anticipated, lowered the deposit rate to 2.75% from 3.0%.

The ECB’s fifth rate cut since June, which had been widely anticipated, lowered the deposit rate to 2.75% from 3.0%.

While the eurozone economy remains weak, recent surveys have shown some signs of revival, and inflation has hovered just above the ECB’s 2% target, reinforcing the case for the recent cut.

“The disinflation process is well on track,” the ECB said in a statement.

“Domestic inflation remains high, mostly because wages and prices in certain sectors are still adjusting to the past inflation surge with a substantial delay,” the ECB added. “But wage growth is moderating as expected, and profits are partially buffering the impact on inflation.”

ECB policymakers likely breathed a sigh of relief at their meeting after U.S. President Donald Trump’s new administration refrained from imposing broad trade tariffs as some had feared.

However, Trump’s continued trade threats have cast a shadow over the economic outlook.