The European Central Bank on Thursday announced a 25 basis point interest rate trim and lowered its inflation expectations on the back of a stronger euro and lower energy costs.
This takes the deposit facility rate to 2%, down from a mid-2023 high of 4%. Ahead of the announcement, traders had been pricing in an almost 99% chance of the quarter-point cut according to LSEG data.
“In particular, the decision to lower the deposit facility rate – the rate through which the Governing Council steers the monetary policy stance – is based on its updated assessment of the inflation outlook, the dynamics of underlying inflation and the strength of monetary policy transmission,” the ECB said in its statement.
One governing council member did not support the decision to cut rates, ECB President Christine Lagarde said during a news conference after the announcement.
The pan-European Stoxx 600
