ECB Weighs Further Rate Cuts Amid Weak Growth

The European Central Bank (ECB) is considering further reductions in interest rates to support economic growth and ensure price stability, despite the actions of the US Federal Reserve. Olli Rehn, a member of the ECB's Governing Council, emphasized the need for continued rate cuts due to disinflation trends and a weakened growth outlook. Chief Economist Philip Lane highlighted the importance of balancing rate cuts to avoid a recession and to effectively manage inflation, cautioning against both rapid decreases and prolonged high rates. Lane asserted that without further monetary easing, the ECB might struggle to meet its inflation target, which could impact the European economy's growth. The ECB's strategy aims to maintain inflation momentum without letting it fall significantly below the target.