Thursday's interest rate cut was the ECB's fifth since June 2024. It pushes down the important so-called deposit rate to 2.75 percent.
The ECB does not provide interest rate forecasts, but says that the current rate is still restrictive and is pushing down inflation pressure.
And as ECB President Christine Lagarde spoke about the risks of a worse European economy outweighing the opposite during the subsequent press conference, bond yields fell clearly, including Swedish ones.
More cuts
The interest rate market is pricing in two or three more cuts this year after Thursday's cut.
In its statement, the ECB adds that the board will continue to shape monetary policy based on incoming data, meeting by meeting, going forward. But Christine Lagarde also said:
We know which direction the journey is going.
The ECB's decision comes after an unexpectedly weak growth figure from the eurozone on Thursday morning, with headwinds in France and Germany dragging down growth in the currency area to zero in the fourth quarter last year.
The ECB's economists had expected a growth rate of 0.2 percent in the fourth quarter.
Inflation on its way down
Inflation in the eurozone rose to 2.4 percent in December, with a notable upward price pressure in the service sector. But the ECB's board expects to reach its inflation target of 2.0 percent during the second quarter of 2025, partly because the pace of wage increases appears to be slowing down.
