The European Central Bank (ECB) has cut interest rates by a quarter-point for the first time in five years, ahead of the Federal Reserve. This decision, made at the governing council meeting in Frankfurt, comes alongside raised inflation forecasts for this year and 2025.
As anticipated, borrowing costs across the eurozone have been reduced from a record high of 4% to 3.75%. This move aligns the ECB with the central banks of Canada, Sweden, and Switzerland, all of which have recently lowered rates, positioning it ahead of the influential US Federal Reserve.
Earlier today, money markets indicated a 92% probability of a rate cut, with only an 8% chance of no change. This marks the first rate cut since September 2019.
Additionally, the interest rate on the main refinancing operations, the rate banks pay when borrowing from the ECB for one week, has been lowered from 4.5% to 4.25%. The marginal lending facility rate, another key interest rate, has been reduced fro ...
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