ECB Cuts Key Interest Rates by 25 Basis Points, First Cut Since 2019

Jun 6, 2024, 12:20 PM

The European Central Bank (ECB) has cut its key interest rates by 25 basis points, marking the first reduction since 2019. The main refinancing rate has been lowered to 4.25%, the marginal lending facility to 4.50%, and the deposit facility rate to 3.75%. This decision aligns with market expectations. Despite the cut, the ECB has stated that it is not pre-committing to any particular rate path, indicating that further rate cuts should not be anticipated at this time. The ECB also raised its inflation forecast for 2024-2025, slightly above its 2.0% target, and emphasized a data-dependent, meeting-by-meeting approach moving forward. This move follows a similar rate cut by the Bank of Canada.