Colin Wu, a crypto news reporter, notes that the European Central Bank (ECB) has announced its first interest rate cut in five years, reducing rates by 25 basis points.
This decision comes amidst projections of inflation at 2.5% in 2024, gradually decreasing to 1.9% by 2026. In addition, GDP growth forecasts expect GDP to rise 0.9% in 2024 and 1.6% in 2026. The move, anticipated by money markets, marks the first cut since September 2019, when the deposit facility entered negative territory.
The European Central Bank announced the first rate cut in five years, 25bps. The ECB expects inflation to be 2.5% in 2024, 2.2% in 2025, and 1.9% in 2026. GDP growth is expected to be 0.9% in 2024, 1.4% in 2025, and 1.6% in 2026. https://t.co/vtft9WFAX7
— Wu Blockchain (@WuBlockchain) June 6, 2024
The unanimous decision to cut rates was made by all 20 national representatives, with ECB President Christine Lagarde emphasizing the>recently became the first major central bank to reduce interest rates this year, prompting speculations of a similar move by the ECB.
In addition to these macroeconomic conditions in the European Union, analysts at QCP Capital suggest that today’s U.S. jobless claims report and the upcoming CPI release could potentially drive Bitcoin to new all-time highs.
QCP Capital further asserts that market momentum might intensify if potential rate cuts are factored into the equation. The sentiment echoes recent actions by central banks worldwide, underlining a collective effort to navigate economic uncertainties. This becomes notable as the ECB is expected to follow suit with a similar quarter-point rate cut.