ECB Eases Policy Amid Economic Strain: Interest Rate Cut Signifies Growing Concerns

The European Central Bank (ECB) cut interest rates for the fourth time this year, signaling potential further easing in 2025 amid economic challenges such as domestic political instability and risks of a trade war with the United States. The ECB aims for a 2% inflation target, suggesting more rate cuts to come.

The European Central Bank cut interest rates again on Thursday, marking the fourth reduction of the year. This move signals potential further easing in 2025 as the eurozone struggles with political instability and the risk of a trade war with the United States.

The ECB's focus has shifted to concerns about a stagnant economy overshadowing previous inflation fears. Predicting that inflation will return to its 2% target by early 2025, the ECB lowered its deposit rate to 3%, aligning with market expectations and hinting at future cuts.

With Europe facing political uncertainties and growth projections falling short, ECB leaders like President Christine Lagarde are under pressure to communicate possible economic strategies, including further rate adjustments, amid a volatile global landscape.

(With inputs from agencies.)