European Central Bank reduces interest rates as economic growth stagnates

The European Central Bank has reduced interest rates five times in a row on Thursday, as local economic growth is slow.

Policy proprieters have reduced bank key rates from a quarter to 2.75 %, as inflation remained relatively close to the 2 % target. This movement will take place the day after the US and Europe's economic prospects branches.

“The growth process is proceeding smoothly,” said the bank, adding a sign that inflation would settle around the target based on sustainable.

The annual inflation rate in the euro area was 2.4 % in December, which was slightly higher than the previous month due to the rise in energy prices.

Central Bank's policy creators have a different perspective on inflation. Some people emphasize signs of sustainable inflation pressure, such as increasing the price of a service sector that stubbornly holds about 4 %. Others, including the bank, Philip R. Lane, states that if the borrowing cost is too long, it may decrease if it expands too much.

The data released on Thursday showed that the euro economy stagnated in the fourth quarter of last year and was weakened after 0.4 % in the previous quarter.

Unexpected sluggishness has put pressure on the central bank officials to reduce interest rates, suffered from the declining competitiveness between the United States and China, and the economic growth in the region is very vulnerable to trade turmoil. It helps to create. The largest German economy in the block has shrunk over the past two years due to high energy costs and interest rates for companies and consumers for the past two years, and political uncertainty is a problem prior to the next election next month. It is getting worse.

However, central bank officials have stated that the government needs to make business and investment easier through borders, and does not rely on monetary policy to stimulate economic growth.

The Federal Reserve stabilized interest rates on Wednesday after the officials said they would “move carefully” in inflation and powerful labor markets.

Last year, the Fed was the same as the European Central Bank, reducing points. In the future, the Central Bank of Japan is not expected to provide more interest rate reductions, despite President Trump seeking them. His policies, such as reducing immigrants and increasing import duties, could worsen inflation pressure. Traders expect the Euro -zone central banks to reduce their fees at most of the first half of this year.

So far, Europe was not a central focus of Trump's plan to increase tariffs. However, there is a feeling of how such an event is destroyed from Canada on Wednesday. From Canada, the Central Bank has reduced interest rates and withdrawn guidance on future policies, under the threat of tariffs on which the Central Bank proposed 25 % of tariffs. Immediately on Saturday.