According to Jin10 Data on June 6, the European Central Bank (ECB) announced its first interest rate cut in five years. However, due to increased uncertainty caused by a significant slowdown in inflation over the past year, investors have no idea about its next move. Thursday's action is seen as the start of an easing cycle, but lingering price and wage pressures are casting a shadow on the outlook, potentially forcing the ECB to wait for months before cutting rates again. Although the ECB has kept its options open for July's policy decision, a range of influential policymakers, including Schnabel and Knot, have given reasons to pause interest rate hikes next month, suggesting that the next opportunity for easing may come in September. Some economists argue that the biggest risk to the ECB's rate cut plan is actually the Federal Reserve, not wages and inflation. The Fed has clearly signaled a delay in policy easing, and any further delay in rate cuts by the US could make the ECB more cautious, as a widening interest rate differential would weaken the euro and push up imported inflation. Attention has now turned to ECB President Lagarde's press conference, where she may be asked about the ECB's next potential actions.
