Inflation's down and the European Central Bank has cut rates, again. Next up: The Fed
With inflation subsiding, the European Central Bank is cutting its benchmark interest rate to prop up tepid growth with lower borrowing costs for companies and home buyers
FRANKFURT, Germany (AP) — With inflation subsiding, the European Central Bank cut interest rates again on Thursday to prop up tepid growth with lower borrowing costs for companies and home buyers. The U.S. Federal Reserve likely won’t be far behind in joining the rate-cutting process.
The bank’s rate-setting council lowered the deposit rate from 3.75% to 3.5% at a meeting at its skyscraper headquarters in Frankfurt.
It was the second rate cut as the bank starts to withdraw some of the swift rate increases it imposed to snuff out a burst of double-digit inflation that broke out after Russia cut off most natural gas supplies over its invasion of Ukraine.
But experts don't expect a rapid series of rate cuts from either the ECB or the Fed central bank to anywhere near the rock-bottom levels from before the 2020 outbreak of the COVID-19 pandemic. They say the ECB will tiptoe, rather than slash, and might cut rates only one more time this year. Inflation's down with the help of lower oil prices.
