EUR/CHF

The Governing Council today decided to lower the three key ECB interest rates by 25 basis points. In particular, the decision to lower the deposit facility rate – the rate through which the Governing Council steers the monetary policy stance – is based on its updated assessment of the inflation outlook, the dynamics of underlying inflation and the strength of monetary policy transmission. The disinflation process is well on track. Staff see headline inflation averaging 2.4% in 2024, 2.1% in 2025, 1.9% in 2026 and 2.1% in 2027 when the expanded EU Emissions Trading System becomes operational. For inflation excluding energy and food, staff project an average of 2.9% in 2024, 2.3% in 2025 and 1.9% in both 2026 and 2027. Most measures of underlying inflation suggest that inflation will settle at around the Governing Council’s 2% medium-term target on a sustained basis. Domestic inflation has edged down but remains high, mostly because wages and prices in certain sectors are still adjusting to the past inflation surge with a substantial delay. post: EUROZONE ECB INTEREST RATE DECISION (DEC) ACTUAL: 3.15% VS 3.40% PREVIOUS; EST 3.15% EUROZONE DEPOSIT FACILITY RATE (DEC) ACTUAL: 3.00% VS 3.25% PREVIOUS; EST 3.00% EUROZONE ECB MARGINAL LENDING FACILITY ACTUAL: 3.40% VS 3.65% PREVIOUS; EST 3.40% post: ECB SAYS APP AND PANDEMIC EMERGENCY PURCHASE PROGRAMME (PEPP) APP PORTFOLIO IS DECLINING AT A MEASURED AND PREDICTABLE PACE, AS EUROSYSTEM NO LONGER REINVESTS PRINCIPAL PAYMENTS FROM MATURING SECURITIES post: ECB: STAFF SEE HEADLINE INFLATION AVERAGING 2.4% IN 2024, 2.1% IN 2025, 1.9% IN 2026 AND 2.1% IN 2027 WHEN THE EXPANDED EU EMISSIONS TRADING SYSTEM BECOMES OPERATIONAL.ECB cuts interest rates for fourth time this year The European Central Bank cut interest rates for the fourth time this year on Thursday and kept the door open to further easing ahead as inflation closes in on its goal and the economy remains weak. The central bank for the 20 countries that share the euro reduced the rate it pays on bank deposits, which drives financing conditions in the bloc, to 3.0% from 3.25%. It was at a record 4.0% only in June. It also signalled that further cuts are possible by removing a reference to keeping rates "sufficiently restrictive", economic jargon for a level of borrowing costs that curbs economic growth. "Financing conditions are easing, as the Governing Council’s recent interest rate cuts gradually make new borrowing less expensive for firms and households," the ECB said. "But they continue to be tight because monetary policy remains restrictive and past interest rate hikes are still transmitting to the outstanding stock of credit."

post: *LAGARDE: LATEST INFORMATION SUGGESTS ECONOMY LOSING MOMENTUM - BBG *LAGARDE: ECONOMY TO STRENGTHEN MORE SLOWLY THAN SEEN EARLIER post: ECB'S LAGARDE EXPORTS SHOULD SUPPORT RECOVERY IF TRADE TENSIONS DON'T ESCALATE post: ECB'S PRESIDENT LAGARDE: DOMESTIC INFLATION REMAINS HIGH. post: MORE ECB'S LAGARDE: EASIER POLICY SHOULD SUPPORT DOMESTIC DEMAND #ecb #europeancentralbank #eurozone #interestrates #monetarypolicy #christinelagarde post: ECB’s Pres Lagarde: Risks To Growth Outlook Tilted To Downside