The European Central Bank (ECB) reduced interest rates by 25 basis points to 3.50% on Thursday, responding to ongoing economic challenges and a slowing inflation rate. This cut follows a similar reduction made in June, as the ECB seeks to bring inflation closer to its 2% target amid near-recession conditions in the eurozone.
Despite the anticipated rate cut, the ECB provided no additional guidance on its future policy trajectory. The central bank reiterated its commitment to a data-driven, meeting-by-meeting approach, without committing to a specific path for future rate changes.
“The Governing Council will continue to make decisions based on incoming data and will not commit to any particular rate path,” the ECB stated.
Attention now shifts to ECB President Christine Lagarde’s upcoming press conference at 1245 GMT. Investors will be looking for clues on potential future rate cuts and the impact of anticipated rate changes by the U.S. Federal Reserve on the ECB’s policy.
Economists predict that Lagarde might leave the door open for another rate reduction in October by indicating that all meetings, including the next one, are “live” for discussion.
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Source: Moneycontrol
News Desk
