Market updates and forecasts

Get the latest economic news from ForexMart, including updates on the financial market, central banks' policy announcements, financial indicators, and other relevant news which can have an impact on the industry.

Disclaimer:  Information provided here to retail and professional clients does not contain and should not be construed as containing investment advice or an investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance.

The ECB may start cutting rates earlier than the Fed due to inflation


April, 04 2024
watermark Economic news

Experts believe that the European Central Bank may begin to ease its monetary policy earlier than the US Federal Reserve. This is due to the fact that inflation in the eurozone is slowing down faster than predicted, while inflation dynamics in the United States remains uneven.


In March, the growth rate of consumer prices in the eurozone decreased to the lowest values since November last year, amounting to 2.4% y/y compared with 2.6% in February. Core inflation, which does not include the cost of food and energy, also fell to the lowest level since February 2022 – 2.9%.


While the key inflation indicator tracked by the Fed, the PCE index, increased to 2.5% in February from the previous 2.4%. However, the PCE Core index fell to 2.8% from 2.9%.


Fed Chairman Jerome Powell said that the fight against inflation has not yet been completed, noting that he does not consider it advisable to lower the rate until there is sufficient confidence in the steady movement of inflation to the 2% mark.


Traders expect the Fed and the Bank of England to cut rates several times (by 25 basis points) in 2024, and the ECB will do so at least three times.At the moment, the Fed's base rate is 5.25-5.5% per annum, the Bank of England – 5.25%, and the ECB – 4.5% on loans, 4% on deposits and 4.75% on margin loans.


The next meeting of the ECB will be held next week, and it is expected that it will make it clear that it is approaching an easing of its policy.


However, the ECB still has reasons to be cautious. Inflation in the services sector in the eurozone remains high, and a significant discrepancy in monetary policy with the Fed can cause sharp fluctuations in the currency and debt markets.


Feedback

ForexMart is authorized and regulated in various jurisdictions.

(Reg No.23071, IBC 2015) with a registered office at Shamrock Lodge, Murray Road, Kingstown, Saint Vincent and the Grenadines

Restricted Regions: the United States of America, North Korea, Sudan, Syria and some other regions.


© 2015-2024 Tradomart SV Ltd.
Top Top
Risk Warning:
Foreign exchange trading carries a high risk of losing money due to leverage and may not be suitable for all investors. Before deciding to invest your money, you should carefully consider all the features associated with Forex, as well as your investment objectives, level of experience, and risk tolerance.
Foreign exchange trading carries a high risk of losing money due to leverage and may not be suitable for all investors. Before deciding to invest your money, you should carefully consider all the features associated with Forex, as well as your investment objectives, level of experience, and risk tolerance.