European Central Bank Considers Gradual Rate Cuts Amid Economic Uncertainty

According to BlockBeats, the European Central Bank (ECB) released the minutes from its December meeting on January 16, revealing that policymakers concluded a cautious and gradual approach to rate cuts is necessary, with potential for further easing in the future. Last month, the ECB reduced rates for the third consecutive time, citing slowing inflation as a reason for further policy relaxation. However, the timing and pace of these rate cuts remain under discussion. The meeting minutes highlighted that, given the current uncertainties, a cautious approach is still deemed appropriate. However, if inflation forecasts for the coming months and quarters are confirmed, a gradual easing of policy constraints is considered suitable. With the economy showing minimal growth, the ECB's focus has shifted from rapid price increases to sluggish economic activity. An increasing number of policymakers now advocate for lowering rates to levels that do not hinder economic growth. The ECB is scheduled to hold its next meeting on January 30, with investors fully anticipating another 25 basis point cut. The benchmark rate is expected to decrease further to 2% by the end of 2025.