Colin Wu, a journalist covering cryptocurrency news, reports that the European Central Bank (ECB) has recently announced a significant interest rate adjustment, marking its first cut in five years with a reduction of 25 basis points.
This decision comes as projections show inflation rates reaching 2.5% in 2024, gradually declining to 1.9% by 2026. Alongside this, forecasts indicate a growth in GDP of 0.9% in 2024 and 1.6% in 2026. The market had been anticipating this move, which is the first cut since September 2019 when the deposit facility entered negative territory.
The unanimous agreement to lower rates was reached by all 20 national representatives, with ECB President Christine Lagarde emphasizing the data-focused approach taken. She emphasized that decisions will be made on a meeting-by-meeting basis.
Lagarde mentioned that while there was consensus on the data-driven direction, one member chose to abstain from voting, without revealing their identity. The governing council reiterated their commitment to thoroughly analyze the inflation outlook, core inflation, and the impact of monetary policy.
With the announcement of this rate cut, market expectations are now centered around the possibility of further reductions. Economists are predicting two more cuts in the near future, aligning with a global trend that began with the Bank of Canada lowering interest rates earlier this year, leading to speculations of a similar move by the ECB.
In addition to these macroeconomic conditions within the European Union, analysts at QCP Capital emphasize that the U.S. jobless claims report released today and the upcoming CPI release could potentially drive Bitcoin to reach new record highs.
QCP Capital suggests that market momentum could escalate if the potential for additional rate cuts is taken into account. This sentiment reflects actions taken by central banks worldwide to address economic uncertainties collectively. The ECB is expected to follow suit with a similar quarter-point rate reduction.
Note: This article is for informational purposes only and should not be considered financial advice. The opinions expressed are those of the author and do not necessarily reflect the views of The Crypto Basic. Readers are advised to conduct thorough research before making any investment decisions. The Crypto Basic holds no responsibility for any financial losses incurred.