EZ Main Refinancing Rate

The Governing Council today decided to lower the three key ECB interest rates by 25 basis points. In particular, the decision to lower the deposit facility rate – the rate through which the Governing Council steers the monetary policy stance – is based on its updated assessment of the inflation outlook, the dynamics of underlying inflation and the strength of monetary policy transmission. The disinflation process is well on track. Inflation has continued to develop broadly as staff expected, and the latest projections closely align with the previous inflation outlook. Staff now see headline inflation averaging 2.3% in 2025, 1.9% in 2026 and 2.0% in 2027. The upward revision in headline inflation for 2025 reflects stronger energy price dynamics. For inflation excluding energy and food, staff project an average of 2.2% in 2025, 2.0% in 2026 and 1.9% in 2027. Most measures of underlying inflation suggest that inflation will settle at around the Governing Council’s 2% medium-term target on a sustained basis. Domestic inflation remains high, mostly because wages and prices in certain sectors are still adjusting to the past inflation surge with a substantial delay. But wage growth is moderating as expected, and profits are partially buffering the impact on inflation. Monetary p post: ECB Cuts Main Refinancing Rate By 25Bps To 2.50%, As Expected - Cuts Marginal Lending Facility By 25Bps To 2.65% - Cuts Deposit Facility Rate By 25Bps To 2.90% post: *ECB CUTS DEPOSIT FACILITY RATE BY 25BPS TO 2.50%; EST. 2.50% *ECB NOT PRE-COMMITTING TO A PARTICULAR RATE PATH *ECB: DISINFLATION PROCESS IS WELL ON TRACK post: ECB: Rates Are `Becoming Meaningfully Less Restrictive' post: *ECB SEES 2025 GDP GROWTH AT 0.9%; PRIOR FORECAST 1.1% *ECB SEES 2026 GDP GROWTH AT 1.2%; PRIOR FORECAST 1.4% *ECB SEES 2026 INFLATION EX-FOOD/ENERGY AT 2.0% VS 1.9% *ECB SEES 2025 INFLATION AT 1.9%; PRIOR FORECAST 1.9%

The Governing Council today decided to lower the three key ECB interest rates by 25 basis points. In particular, the decision to lower the deposit facility rate – the rate through which the Governing Council steers the monetary policy stance – is based on its updated assessment of the inflation outlook, the dynamics of underlying inflation and the strength of monetary policy transmission. The disinflation process is well on track. Inflation has continued to develop broadly in line with the staff projections and is set to return to the Governing Council’s 2% medium-term target in the course of this year. Most measures of underlying inflation suggest that inflation will settle at around the target on a sustained basis. Domestic inflation remains high, mostly because wages and prices in certain sectors are still adjusting to the past inflation surge with a substantial delay. But wage growth is moderating as expected, and profits are partially buffering the impact on inflation. post: EUROZONE ECB INTEREST RATE DECISION (JAN) ACTUAL: 2.90% VS 3.15% PREVIOUS; EST 2.90% EUROZONE DEPOSIT FACILITY RATE (JAN) ACTUAL: 2.75% VS 3.00% PREVIOUS; EST 2.75% EUROZONE ECB MARGINAL LENDING FACILITY ACTUAL: 3.15% VS 3.40% PREVIOUS; EST 3.15% post: ECB: INFLATION HAS CONTINUED TO DEVELOP BROADLY IN LINE WITH STAFF PROJECTIONS AND IS SET TO RETURN TO ECB’S 2% MEDIUM-TERM TARGET IN COURSE OF THIS YEAR. post: ECB: APP AND PANDEMIC EMERGENCY PURCHASE PROGRAMME (PEPP) APP AND PEPP PORTFOLIOS ARE DECLINING AT A MEASURED AND PREDICTABLE PACE, AS EUROSYSTEM NO LONGER REINVESTS PRINCIPAL PAYMENTS FROM MATURING SECURITIES. post: ECB: IN PARTICULAR, ECB’S INTEREST RATE DECISIONS WILL BE BASED ON ITS ASSESSMENT OF INFLATION OUTLOOK IN LIGHT OF INCOMING ECONOMIC AND FINANCIAL DATA, DYNAMICS OF UNDERLYING INFLATION AND STRENGTH OF MONETARY POLICY TRANSMISSION.