European Central Bank Expected to Cut Interest Rates, Weakening Currency and Diverging from the Federal Reserve from bank of america sign in edd Watch Video
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⏲ Duration: 0:45 👁 View: 13.1M times ✓ Published: 04-Jun-2024
Description: The European Central Bank is expected to cut its interest rates on Thursday, which could lead to a weaker euro as the region's monetary policy diverges from that of the United States. The ECB is comfortable with this divergence, even if it means a weaker currency that could potentially stoke inflation. Recent data shows that underlying inflation in the euro area unexpectedly rose in May for the first time in a year, adding to the concerns about lingering consumer-price pressures. The ECB's decision will be accompanied by quarterly forecasts and a press conference, which will be scrutinized for hints of future policy intentions. Money markets are currently betting on two rate reductions this year, with a small chance of a third.