Central Banks
Lagarde’s Reluctant Cut Leaves Markets Guessing on Next ECB Move
- Long-touted reduction brings deposit rate down to 3.75%
- Markets are increasingly querying the path of monetary policy
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The European Central Bank delivered on its promise to cut interest rates but left investors querying where policy is headed next by also saying it will take longer for inflation to reach 2%.
While Thursday’s quarter-point reduction in the deposit rate from its nine-month peak at 4% was widely expected, the upward revision to next year’s forecast for consumer-price growth — to 2.2% from 2% — came as more of a surprise.