The European Central Bank reduces interest rates, and keeps the options open

the European Central Bank Reducing interest rates as expected on Thursday and maintained all options on the table for its following meetings even as the issue grows to stop the summer in the mitigation cycle for a year.

The European Central Bank has now reduced borrowing costs eight times, or by 2 percentage points, since last June, seeking to support the economy of the euro zone, which has been struggling even before economic and trade policies in the United States dealt.

with The inflation is now safe in the queue Thanks to its 2 % goal and a good division, the focus has turned into the European Central Bank’s message about the next track, especially since the rates of 2 % are now in the “neutral” range where it does not stimulate or slow growth.

Reducing economic growth expectations in the United States sharply due to the high customs duties

However, the Central Bank of the Twentieth State, which is involved in the euro, made few hints in its statement, however, adhering to its slogan that decisions will be made on the basis of the meeting and based on the data received.

The European Central Bank said, “The Governing Council does not meet a pre -pathway to a specific rate of course,” said the European Central Bank. “The interest rate decisions will be based on their evaluation of inflation expectations in light of the incoming economic and financial data, the basic inflation dynamics and the power of monetary policy transmission.”

The Cristine Lagarde News Conference may present to the President of the European Central Bank 1245 GMT more clues on the coming months, as the most aggressive discriminatory session of the bank is expected to start the bank since 2008/2009.

Investors are already stopping in July, and some conservative policy makers have called for a break to give the European Central Bank an opportunity to reassess how urgent and exceptional policy at home and abroad will transfer expectations.

While a member of the European Central Bank Board and President of Hook Isabelle Shenbel had made explicit invitations to temporary suspension, others were more cautious and Lagarde is likely to abide by the language that leaves the European Central Bank options open, because expectations are subject to sudden changes.

Trump is looking for the best offers for countries before the date for the tariff

The state of temporary suspension depends on the hypothesis that currency horizons are short and medium in the short term, and it may require various political responses.

The short -term inflation can decrease – perhaps even below The goal of the European Central Bank But increased government spending and high commercial barriers may add price pressure later.

Added complications are that monetary policy affects the economy through a delay from 12 to 18 months, so the support approved now may be to provide assistance to the mass that you can no longer need.

Investors still see at least a decrease in prices later this year, and a little opportunity in another move at a later time, especially if the American president is Donald Trump The trade war is condensed.

Various look

When admitting the short -term weakness, the European Central Bank has reduced the dropping of inflation for the next year.

Trump’s introductions are already harmful activity and will have a permanent effect even if a friendly decision is found, given the success of confidence and investment.

The European Central Bank said, “The escalation of additional commercial tensions in the coming months will lead to less growth and inflation than basic expectations,” the European Central Bank said. “In contrast, if commercial tensions are resolved with a benign result, growth, and with a lesser extent, inflation will be higher than basic expectations.”

This slow growth, along with a decrease Energy costs And the strong euro, will curb prices.

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In fact, most economists believe that inflation can be less than the goal of the European Central Bank by 2 % next year, which led to pre -trial memories when price growth is 2 % lower, even if projections appear in 2027.

Moreover, expectations change significantly.

The European Union is likely to split from any permanent American tariff, which raises the cost of international trade. Companies may move some activities at the same time to avoid commercial barriers, but it is also possible to raise changes in the value of the company’s value.

European defensive spending is higher, especially by Germany, and the cost of green transition can add to inflation while the workforce due to the aging of the population will keep wage pressure high.