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Writer's pictureBy The Financial District

ECB Set To Deepen Global Easing With Rate Cut It Didn’t Expect

The European Central Bank (ECB) will likely advance the global push for monetary easing in the coming week with an interest-rate cut that policymakers had all but ruled out just a month ago, Craig Stirling reported for Bloomberg News.


Officials appear to be moving away from their recent caution about lingering inflation pressures, responding instead to survey data pointing to a contraction in the private sector.



The third quarter-point reduction of this cycle is expected by economists to signal a longer-lasting acceleration in actions by officials seeking to cushion the eurozone from the impact of an extended period of high borrowing costs, which are now affecting the economy with a delay.



ECB President Christine Lagarde, at the press conference she will host after Thursday’s meeting near the Slovenian capital of Ljubljana, may be questioned about the path forward for further cuts and what has materially changed since the September meeting.



With a shorter-than-usual gap of just five weeks between decisions and limited new data available, officials appear to be moving away from their recent caution about lingering inflation pressures, responding instead to survey data pointing to a contraction in the private sector.


Such reports have influenced financial markets and generated momentum for a widely anticipated rate cut, following policymakers’ endorsement of the change in outlook.




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