European Central Bank trims interest rates after inflation dips below target
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ECB Cuts Rates to 2% for Eighth Time
Above: Christine Lagarde, President of the European Central Bank, speaks to the media following a meeting of the ECB's governing council on Jan. 30, 2025, in Frankfurt, Germany. Image copyright: Thomas Lohnes/Stringer/Getty Images News via Getty Images
The Spin
Narrative A
The threat posed by President Trump's tariff regime is too great to be an inflation hawk, and the ECB made the right choice by cutting rates to give the economy some breathing room while Europe deals with the ramifications of it. In the face of a potential crisis, the ECB showed real leadership.
Narrative B
All is not well with the European economy, and an inflationary resurgence could batter an already flagging EU economy. The ECB must make its decisions based solely on the facts, and not on politics or remote fears, especially as growth could stagnate if defense spending tapers off.