European Central Bank Cuts Interest Rates Again and Lowers Growth Forecasts
The European Central Bank on Thursday delivered a quarter-point interest rate cut, marking its second reduction to the deposit rate this year.
The widely anticipated move comes after a period of sluggish economic growth across the euro zone and cooling inflation, which fell back toward the central bank's 2% target in August.
The ECB lowered its 2024 growth forecast to 0.8%, down slightly from an earlier projection of 0.9%, citing "weaker contribution from domestic demand over the next few quarters."
For many market participants, the big question was not whether the ECB would cut rates in September ââ-š¬Ã¢â‚¬ but whether the central bank will provide any clues as to what will follow.
The ECB's Governing Council said in a statement that it "is not pre-committing to a particular rate path," while reaffirming the need to take a data-dependent and meeting-by-meeting approach.
Economists are split over whether policymakers at the ECB will look to pause when they meet again on Oct. 17, as they had done in July, before potentially reducing rates by another quarter-point on Dec. 12.
The ECB's meeting comes just days before the Federal Reserve appears poised to start its own rate-cutting cycle.
Source : CNBC
