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FILE - President of European Central Bank, Christine Lagarde, attends a press conference after an ECB's governing council meeting in Frankfurt, Germany, on Jan. 25, 2024. The European Central Bank appears ready to start cutting interest borrowing costs for businesses and consumers - and do it ahead of the Fed. Analysts say a first rate cut is coming Thursday when the bank's policymakers meet in Frankfurt, Germany. . (AP Photo/Michael Probst, File)

Interest rates are likely headed down, at least in Europe

The European Central Bank appears ready to start cutting interest rates before the U.S. Federal Reserve

By David Mchugh
Published - Jun 06, 2024, 02:21 AM ET
Last Updated - Jun 06, 2024, 02:21 AM EDT

FRANKFURT, Germany (AP) — The European Central Bank plans to move ahead of the U.S. Federal Reserve on Thursday in cutting interest rates, making the eurozone the biggest rich-world economy to start easing borrowing costs for businesses and consumers as the inflation that arose after Russia's full-scale invasion of Ukraine slowly recedes.

ECB President Christine Lagarde and other officials have made it clear that a quarter-point rate cut from the current record high of 4% is more than likely when the bank's 26-member governing council meets at the institution's skyscraper headquarters in Frankfurt, Germany.

Such a move would represent a switch from the onset of the inflation surge, when the Fed took the lead in tightening credit by raising rates starting in March 2022, sending mortgage costs higher but also boosting returns for savers with money in certificates of deposit or money market funds. The ECB started about four months later.

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