Logo

Will ECB cut rates next week? Insiders nearly promise cuts from June 6.

TraderKnows
TraderKnows
05-27

The European Central Bank has hinted multiple times recently, almost explicitly promising a rate cut in June.

Philip Lane of the European Central Bank stated that the ECB is prepared to cut interest rates starting next week, the Financial Times reported on Monday. This announcement comes ahead of the ECB's policy meeting on June 6th.

In an interview with the Financial Times, Lane said, “Unless there are major surprises, the current situation justifies removing the highest level of restrictions.”

Lane noted that ECB policymakers need to keep interest rates in a restrictive zone this year to ensure that inflation continues to decline and to avoid inflation exceeding the bank's target. This “will be very tricky and may require considerable effort to achieve.”

He said that the speed of lowering borrowing costs in the euro area this year will be determined by assessing the data to ascertain whether it is safe and appropriate.

The ECB has almost pledged to cut rates on June 6th, but after stronger-than-expected wage data, some analysts have lowered their expectations for further rate cuts.

In the first quarter of 2024, negotiated wage growth in the euro area picked up slightly, making the case for cautious rate cuts from record highs more compelling.

However, Lane stated, “The overall direction of wage growth still points to a slowdown, which is crucial.”

“The best way to discuss this year is that we need to maintain restrictive policy throughout the year,” Lane added, “But within the restrictive zone, we can slightly lower rates.”

SKYPE TU

公众号2

Risk Warning and Disclaimer

The market carries risks, and investment should be cautious. This article does not constitute personal investment advice and has not taken into account individual users' specific investment goals, financial situations, or needs. Users should consider whether any opinions, viewpoints, or conclusions in this article are suitable for their particular circumstances. Investing based on this is at one's own responsibility.

The End

Wiki

Interest rate cut

A rate cut refers to the central bank adjusting the interest rate level so that it is lower than before, as a form of monetary policy. It is a means by which the central bank affects the supply and demand relationship in the money market, money creation, and the level of interest rates by changing the level of interest rates. Rate cuts are usually used to counter inflation, stimulate economic growth, or alleviate economic downturn pressures.

Related News

Risk Warning

TraderKnows is a financial media platform, with information displayed coming from public networks or uploaded by users. TraderKnows does not endorse any trading platform or variety. We bear no responsibility for any trading disputes or losses arising from the use of this information. Please be aware that displayed information may be delayed, and users should independently verify it to ensure its accuracy.

Logo

Contact Us

Social Media

footer1