Call it the ECB's 'declaration of independence.'
The European Central Bank now looks poised to kick off the global interest rate-cutting cycle among major economies. It strongly hinted Thursday that this could happen in June — which would likely front-run the Fed in a huge policy pivot.The ECB added an intriguing sentence to its policy statement that all but confirms it's on track to cut rates soon.
"We have to focus on what we have jurisdiction for, which is the euro area — taking into account what happens in the rest of the world, but not assuming that what happens in the euro area will be the mirror of what happens in the United States," Lagarde said. That has been particularly true between the Fed and ECB, the two most important world central banks, which closely communicate their intentions in hopes of avoiding unnecessary disruption to trade and financial flows.has come in strong alongside signs of solid economic activity. Meanwhile, inflation in the euro area has continued to ease, coming down from its peak of nearly 11% in late 2022 to 2.4%, as of March, amping up bets that a rate cut is on the horizon.
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