The European Central Bank announced its June interest rate decision, and as expected, it cut interest rates by 25 basis points, the first time since 2019. It is the second central bank among G7 member countries to cut interest rates. Last night, the Bank of Canada fired the first shot of interest rate cuts among G7 countries.
Specifically, the deposit facility rate in the euro area is 3.75%, the previous value is 4%, which is the first reduction since September 2019; the main refinancing rate in the euro area is 4.25%, the previous value is 4.5%; the marginal lending rate in the euro area is 4.5%, the previous value is 4.75%, all of which have been reduced for the first time since March 2016.
It is worth mentioning that the ECB stated that it would not make a pre-commitment to any specific interest rate path, which means that it is unlikely that there will be continuous interest rate cuts in July. The ECB also said that the inflation outlook has "significantly improved", but at the same time raised its inflation expectations for 2024.
After the announcement of the ECB's decision, traders maintained their expectations of a rate cut by the ECB, and expected another 40 basis points of rate cuts this year.