ECB Hints at Pause in Rate Cuts After Inflation Hits Target

The European Central Bank, in a widely anticipated move, slashed interest rates on Thursday but signaled a possible halt in its easing cycle after achieving its inflation target of 2%. Over the past year, the ECB has reduced borrowing rates eight times to revitalize the euro zone's lagging economy.

ECB President Christine Lagarde stated that the central bank is 'well-positioned' in terms of current rates, subtly hinting at a pause. Sources indicated there is consensus within the bank to refrain from further cuts unless market unrest arises. Lagarde's comments were perceived as a potential conclusion to the aggressive rate-cutting cycle.

In light of uncertainty from factors such as falling energy prices and U.S. trade policies, the ECB also presented alternative economic scenarios. While inflation is projected to dip below the 2% target next year, increased government spending and European defense investments might prompt future inflationary pressures.

(With inputs from agencies.)