ECB Poised for Another Rate Cut Amid Inflation Concerns

The European Central Bank (ECB) is expected to cut interest rates again, focusing on the speed at which borrowing costs should be reduced. President Christine Lagarde is likely to maintain a meeting-by-meeting approach, keeping all options open. The ECB's economic forecasts are not expected to resolve the debate between hawkish and dovish policymakers.

The European Central Bank (ECB) is almost certain to cut interest rates again on Thursday. However, with inflation risks persisting despite sluggish growth, investors will scrutinize its message for hints on further easing measures.

ECB President Christine Lagarde is expected to stick to a strategy of making decisions on a meeting-by-meeting basis, yet she may imply that all future meetings are "live," suggesting a possible rate cut in October. While some policymakers argue for slower easing due to ongoing inflation concerns, others highlight rising recession risks and the need for prompt action.

New economic forecasts are unlikely to settle this internal debate. Most policymakers agree on further easing, but the main discussion revolves around the timing. With another rate cut by December already priced into financial markets, Lagarde's primary aim during her news conference will be to keep all options on the table without fueling October rate cut expectations.

(With inputs from agencies.)