As we noted in our preview, and as widely expected, the ECB cut rates by 25bps as expected, its 5th consecutive rate cut since the central bank launched its easing cycle in June 2024. Specifically, the interest rates on the deposit facility, the main refinancing operations and the marginal lending facility will be decreased to 2.75%, 2.90% and 3.15% respectively, with effect from 5 February 2025.

In the accompanying policy statement the ECB said it was not pre-committing to any particular rate path. It said it was determined to ensure that inflation stabilises at 2%. The ECB said the disinflationary process is on track, and said that inflation should be back to 2% this year.

Some more highlights from the report:

POLICY STANCE:

ECONOMY:

INFLATION:

GUIDANCE:

As Bloomberg summarizes, in its statement, the ECB still describes monetary policy as “restrictive” even after today’s cut. That’s signaling more easing is in the pipeline, because almost all officials have said that now the aim is to bring rates to a neutral level that no longer restricts activity. But the extent and pace of further moves remains open, with the guidance unchanged.

The euro stays lower after the European Central Bank cut interest rates by 25 basis points as widely expected. Watch the press conference live here (due to start at 0845ET):

Now it’s up to Lagarde to say more – or not. Watch the press conference live here (due to start at 0845ET)