From Fortune: 2024-06-06 11:09:17

ECB President Christine Lagarde signals a quarter-point rate cut from the record high 4% is likely when the 26-member council meets in Frankfurt. Inflation control remarks by Lagarde and other officials have analysts convinced of a cut. Other major central banks are leaning towards lowering interest rates as well. The eurozone’s inflation surge was triggered by the Russian gas supply cutoff, but inflation in May fell to 2.6%. Fed Chair Jerome Powell expects rate cuts this year due to government stimulus-induced inflation. Market analysts anticipate the ECB to make a quarter-point rate cut on Thursday, which may kick off further cuts.
Lower ECB rates impact borrowing costs, mortgage loans, credit card charges, stock prices, and retirement accounts. Higher ECB rates have negatively impacted Germans, dampening home prices and construction activity, while increasing upfront costs for renewable energy projects. Economic growth in the eurozone has been stagnant, prompting the need for lower rates. Subscribe to CFO Daily to stay updated on corporate finance trends and news.



Read more at Fortune: Interest rates are almost definitely about to head down—in Europe