The ECB sees the rate cut as insurance against downside risks.

◻️The ECB stated in the minutes of the Governing Council meeting held on October 16-17 that last month's rate cut was considered an insurance move against downside risks in economic growth and inflation.

◼️The minutes emphasized that this step could provide insurance against the risks of falling short of the target and support a soft landing.

◻️It was also stated that if the economic slowdown and the decline in inflation prove to be temporary, the rate cut may only have brought forward the December cut.