The ECB has cut its base lending rate to 0.25%. The euro slid, markets rallied, and credit became even cheaper. The cut will likely benefit struggling eurozone countries. But it could also ward off eurozone deflation.
The European Central Bank has left interest rates and massive support for the eurozone economy unchanged, despite sharp upgrades to the bank's growth forecasts. But inflation will remain stubbornly low, the ECB says.
Prices in Germany rose faster than expected in November, strengthening the case of the European Central Bank, which has argued that its economic stimulus will eventually lead to more growth and higher inflation.
The European Central Bank has announced a cut in its bond-buying economic stimulus program, taking its biggest step yet towards unwinding years of loose monetary policy introduced in the wake of the financial crisis.
For nine years, interest rates have fallen and the European Central Bank has fired up the economy with a flood of money. It is becoming increasingly clear that this cannot last forever.
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