The European Central Bank warns of the “opposite winds” to the eurozone economy, as it reduces its average to 2.75 %

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The European Central Bank has warned of the “opposite winds” of the stagnant economy in the euro area, as it reduced the standard interest rate by a quarter of a point to 2.75 percent.

A step on Thursday, which sends the European Central Bank’s deposit rate to its lowest level since early 2023, came hours after Eurostat stated that the eurozone economy did not grow at all in the fourth quarter of 2024.

“The economy still faces the opposite wind,” the European Central Bank said, while it is repeated that the decrease in inflation, which decreased from the peak of 2022 amounted to 10.6 percent to 2.4 percent in December, was “good on the path.”

The central bank added that “monetary policy remains restricted” – a recognition that interest rates are still higher than the neutral rate that does not motivate or hinder the economy.

The euro is rarely strengthened after the expected reduction on a large scale, an apartment per day against the dollar at $ 1.042.

The European Central Bank has now reduced interest rates five times since last summer and in trading immediately after the decision, the siped markets were pricing in discounts or three other points by the end of the year, and did not change from the time earlier in the day.

“Our point of view is that economic data will continue to push the European Central Bank to reduce each meeting until the deposit price reaches 1.5 percent,” said Thomas Weldic, chief European economist in asset director Tr Ro Price.

He pointed to the threat to economic growth in the euro area, which was put in place by US tariff plans, Donald Trump, and the expected decline in inflation later in the year.

The central bank predicts a slight growth acceleration from 0.7 percent for the past year to 1.1 percent this year.

On Thursday, the European Central Bank repeated that “the effective effects of the restricted monetary policy should support the demand for demand over time,” indicating increases in real income and low borrowing costs.

In contrast to slow progress in the eurozone, the American economy expanded at an annual rate of 2.8 percent in the third quarter of last year.

The European Central Bank’s decision also came a day after keeping the American Federal Reserve.

Investors’ expectations will reduce prices more than the Federal Reserve this year, which is close to the dollar equal.

“At the present time, there is no question if the European Central Bank continues to reduce interest rates this year, but by the amount,” wrote Ulrich Catter, chief economist at Deca Bank.

In the transformation from the previous charity language, in December, the European Central Bank decreased in compliance with “maintaining adequately restricted policy rates for the longest necessity” to drop inflation in line with its 2 percent goal.