ECB Considers Further Rate Cuts Amid Inflation Drop

The European Central Bank (ECB) is contemplating further interest rate cuts amidst declining inflation and economic stagnation in the Eurozone. Policymakers are divided over the necessity of a significant half-point rate cut in December, following recent back-to-back rate reductions, the first in 13 years. Some policymakers argue that deeper cuts may be needed to prevent inflation from dropping too low, as the ECB strives for a neutral rate that neither stimulates nor restricts growth. An ECB survey indicates inflation may return to the 2% target sooner than expected, with forecasts suggesting it will remain close to this level in the longer term. The Eurozone's economic growth is projected to be sluggish, with inflation expected to stabilize at 1.9% next year, prompting investors to anticipate further rate cuts in the coming meetings. ECB President Christine Lagarde and other officials emphasize a cautious approach, considering current economic data before deciding on the magnitude of future cuts.