ECB cuts rates, says that disinflation is 'well on track'

(Sharecast News) - The European Central Bank cut rates again and expressed confidence that inflation would continue to head lower. Disinflation "is well on track" and expected to return to the 2.0% medium-term target in 2025, the monetary authority said in its policy statement.

Wage growth was moderating as they had anticipated, in part due to company profits acting as a buffer.

Aggregate demand on the other hand was said to still be facing headwinds, but increases in inflation-adjusted incomes and the fading impact of restrictive monetary policy was expected to support a recovery "over time".

As ever, the ECB kept all its options open, saying that "the Governing Council is not pre-committing to a particular rate path".

Nevertheless, during her presser, ECB chief Christine Lagarde was clear that rates were headed lower still.

She told journalists that there had been no discussion on Thursday about when to stop lowering rates.

The ECB's rate on its deposit facility, for its main

refinancing operations and marginal lending facility were all cut by 25 basis points to 2.75%, 2.90% and 3.15%, respectively.

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