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The European Central Bank has warned the stagnant economy in the stagnant economy, as it reduced the benchmark interest rate to a quarter and reduced to 2.75 %.
Since early 2023, the ECB deposit rate has been raised to the minimum level of ECB's deposit rate to the minimum level, the unanimous decision on Thursday has not grown in the fourth quarter of 2024 in the fourth quarter of 2024. It was done.
ECB's president of Christine Lagarde warned that the economy was “set to remain weak in the short term” and added that even if the service grows, the production industry has been continuously controlled. “The consumer trust is fragile,” she said.
She has a greater friction in global trade, which can squeeze the euro economy, and lower trust can lead to investment and consumption resistance, so the economic risk is “negative. I claimed.
It is not easy to know if tariffs are inflation or deflation, but “what we know will have a global negative impact” did.
In a statement accompanied by the decision, the ECB claimed that the decrease in inflation, which decreased from 10.6 % to 2.4 % in December, was “smooth” and stated that “the economy is still facing. More headwind. “
Central Bank added that monetary policy is still limited. This is a recognition that interest rates are still higher than neutral interest rates that do not stimulate or hinder the economy.
Lagardo said that the ECB's Government Council did not even discuss the possibility of reducing half of this month.
After the meeting, the euro was slightly enhanced and increased by 0.1 % a day against $ 1.043.
The ECB has been reduced five times since last summer, due to a widely predicted decision on Thursday. Immediately after that, the transaction was set in the swap market by the end of the year with two or three -quarter reductions.
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“In our opinion, economic data means that all meetings will continue to reduce ECB until the deposit rate reaches 1.5 %,” said Tomasz Wieldek, Chief European Economist of the Asset Manager T Rowe Price. , We predict more reduction than market consensus.
He quoted the threat to economic growth in the Euro area, which was brought about by President Donald Trump's tariff plan, and a decrease in inflation expected in the second half of the year.
Lagardo stated that policy proprietors could not give a solid guidance because they were facing “serious and probably increasing uncertainty.”
She added the ruling council, saying, “We have not discussed the points we need to stop. [cutting interest rates]During the meeting on Thursday.
“We know the direction of the trip. This is the direction we take,” she said, and claimed that the sequence, pace, and size of further cuts were data -driven.
She claimed that the recent increase in borrowing costs of the long -term Euro government government was due to US market movements, but that the reduction of ECB still affected the Euro economy.
Despite the reduction, the 10 -year bond yield in Germany, a euro benchmark, has risen almost half, from low in December to the current 2.51 %. The yield moves in the opposite price.
On Thursday, the ECB repeatedly pointed out the increase in income and the reduction of borrowing costs, saying, “The gradual decline of restricted monetary policy should support the pickup of demand over time.”
“There is a recovery.. Lagard said last year's growth was twice that of 2023, and the labor market was strong.
However, ECB predicts only a small acceleration of growth from 0.7 % last year to 1.1 % of this year.
In contrast to the stagnation in the Euro area, the US economy expanded at an annual rate of 2.3 % a year in the fourth quarter of last year, equivalent to about 0.6 %.
The ECB decision was made the day after the US Federal Reserve had its interest rates.
Investors have weakened the euro, which is expected to reduce the price more than this year's Fed, which is approaching the dollar.
“The problem is now that the ECB will continue to reduce interest rates this year, but how much interest rates will be reduced, but Dekabank's Chief Economist Ulrich Kater wrote a note to the client.
In the previous transition from the previous Hawkish language, the ECB dropped a commitment to “keeping the policy rate sufficiently” in December, and reduced inflation to the 2 % goal.
