The European Central Bank has implemented its second interest rate cut this year, lowering the benchmark deposit rate to stimulate economic activity amid impending U.S. tariffs on EU exports. The ECB's actions align with expectations of a disinflation process, though officials express caution regarding further cuts due to economic volatility. Inflation rates are showing signs of easing, with a drop to 2.4%. However, fluctuations in energy prices linked to geopolitical tensions may disrupt forecasts for inflation to meet the 2% target by 2026.
The European Central Bank has cut interest rates twice this year, responding to economic threats from U.S. tariffs and the need to stimulate eurozone growth.
Despite the recent cuts, ECB officials remain cautious due to the volatile international situation and potential reversals in inflation trends, particularly related to energy prices.
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