European Central Bank, Base interest rate lowered by 0.25%p…Signal of monetary easing

The European Central Bank (ECB) initiated monetary easing by lowering the base interest rate by 0.25 percentage points. With this decision, the deposit rate decreased from the previous 2.50% to 2.25%. The result matches market expectations.

It is interpreted that the ECB lowered rates despite inflationary pressures easing because the economic recovery within Europe remains weak. The recent economic indicators of the Eurozone reflect a slowdown in consumption and a reduction in investment, and governments are also more inclined towards monetary policy than fiscal policy.

This decision is speculated to have an indirect impact on the future interest rate policy of the United States Federal Reserve (Fed). The market is closely watching whether the ECB will make further cuts, along with the reactions of other major central banks.