Explain the way for the interest rate of European Central Bank of European
The photo, held on January 30, 2025, shows the European Central Bank ECB headquarters in Frankfurt, Germany.
Zhang Fan/Linuhua by Gatey images
The European Central Bank is expected to trim a large number of interest rates this year as the third thighs are at risk of economic growth of the euro zone due to global rates and uncertainty.
Until Wednesday, the market price of the Central Bank’s quarter-point interest rates was approximately 94 % and LSEG statistics, the highest price in the market was about 94 % of the market.
The fourth-point deduction will go up to the ECB facility rate, its main rate, up to 2.25% at the highest level of 4% in the middle of -2023.
The series of relatively fast-speeding interest rate deductions has been played as inflation in the Euro area is constantly under 3% and has recently closed down 2% of the ECB. Meanwhile, regional economic growth has increased.
When the Central Bank reduced the final rate in March, he pulled around his language around the monetary policy, which said, “meaningfully, it is meaninglessly restricted.” In January, the ECB still featured the economic policy as “preventive”.
The change in language was explained by some economists that the policymakers were taking more care to lower interest rates, asking the question whether to pause in the financial income cycle. But over the past few weeks, the global trade and rate roller coaster has changed this opinion a bit.
Fears of tariff-trigger growth
“After the March meeting, the ECB was ready to pause at the next meeting. With the interest rate at the upper end of the range, the breath seemed to be right,” ING’s Macro’s world chief Karston Brazesky said on Monday.
“Euroforia has clearly improved the vision of Eurozone growth after spending more on security and protection of the German financial year, especially in the German financial year.
And so, “forced to cut the ECB,” Brazeski evaluated.
Many announcements of the United States have been planned or reduced – at least temporarily – because they were first imposed by President Donald Trump this month, with revenge measures revealed by Washington’s commercial partners. But the view of the financial consequences of trade, rates, and potential consequences is still confusing, investec economist Ryan Dajasaputra has indicated in a letter.
“Uncertainty is high and the European Union will be able to contract with the United States yet. The current atmosphere is not sure that the US president will not change its policies in the future,” he said.
Restricted rates?
After already softening their language about how many restricted rates are in March, the ECB may again tweak on Thursday.
ING’s Brazesky said that the Central Bank should “change its communication” suggests that the Central Bank has indicated that the deposit rate will be reduced, if the ECB chooses the next trim option will now be in the range of neutral interest rates.
There has been a discussion between policymakers, analysts and economists on the issue of where the so -called neutral rates for the ECB are now discussed for several months. At a neutral level, interest rates do not stimulate or prevent the economy and keep stable.
ECB Estimation Its neutral rate ranges from 1.55% to 2.25%.
Economists at the Duh Bank Research began to feel more hesitant about any possible language changes, and he said that the language would remain unchanged on Thursday. “From the point of view that inflation is returning to the target, it has an underlying dovish bending.”
ECB rate perspectives ‘clouds’ by US policy
Looking beyond the ECB’s decision on Thursday, the way to move forward for interest rates is expected to be “open-end”, Duh Bank’s research economists argued.
They do not see the words of the leading ECB words of the leading approach from policymen, saying that they are not pre-designated on the path of a specific rate and make decisions on each meeting in a data-based way.
He said, “This open-ending word lets remain restricted, can remain neutral on the basis of data, turns neutral or stimulating,” he said, “he said,” he said that in June, it is possible to pause the interest rate trim in June.
According to economists, the next rate was reduced.
Further, in terms of strategic way, the US and global trade will depend on the events, the DJsaputra of Investch suggested.
He said, “Beyond the April meeting, the interest rate of ECB is a cloudy and looks at the strategic decisions of the White House.
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