ECB's Bold Moves Amid Eurozone Uncertainty

The European Central Bank cut interest rates again, amidst eurozone political instability and the threat of a U.S. trade war. Despite this, concerns linger about economic growth and inflation, with policymakers pushing for significant interest rate cuts to aid a skirting recession economy.

The European Central Bank (ECB) has slashed interest rates for the fourth time this year, signaling more potential cuts as political instability and trade threats loom over the eurozone. The ECB's swift policy easing comes amid dissipating inflation concerns and a slowly growing economy.

ECB President Christine Lagarde highlighted increasing economic uncertainty, even as policymakers agreed on a 25 basis point cut to stabilize the economy. The shift in guidance hints at further policy easing, potentially as soon as January, with inflation expected to meet the ECB's 2% target by early 2025.

Despite the recent cuts, the ECB faces pressure to normalize rates without hasty moves. Lagarde noted the "downside risk" to growth from upcoming U.S. trade tensions and domestic issues in Germany and France. Projections suggest slower-than-anticipated economic recovery, with potential rate reductions continuing through 2025.

(With inputs from agencies.)