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RATE CUTS ARE HERE (Eruptions Market Report 6-7-24)

The European Central Bank lowered interest rates on Thursday for the first time in nearly five years, signaling a pivot away from its aggressive policy to stamp out a surge in inflation.

As inflation returned within sight of the bank’s 2 percent target, officials cut by a quarter-point their three key interest rates, which apply across all 20 countries that use the euro. The benchmark deposit rate was lowered to 3.75 percent from 4 percent, the highest in the bank’s 26-year history and where the rate had been set since September.

“The inflation outlook has improved markedly,” Christine Lagarde, the president of the E.C.B., said on Thursday at a news conference in Frankfurt. “It is now appropriate to moderate the degree of monetary policy restriction.”

Rate cuts are here.

The Federal Reserve is projected to make rate cuts later this year as well.

As I've stated many times back when the rate hikes were occurring, the central banks have dug themselves a deep hole (not that they care).

They printed trillions and trillions of dollars during COVID, DIRECTLY causing some of the worst inflation in decades.

Then they made the fastest rate hikes in history, which crashed the economy AND failed to get inflation down to the conventional target of 2% (due to the malicious money printing they previously engaged in).

If they continue slashing rates, inflation will simply resume it's upwards trajectory, further destroying the middle class (again, they couldn't care less. They merely care about protecting their currency oligopoly).

If they continue to raise rates, economic growth will continue to stagnate.

This is the great FAILURE of Keynesian economic theory, a core principle of which is that inflation is NECESSARY for economic growth.

Eventually the money becomes worthless, and the economy collapses anyway.

It's not a matter of if, but when.

Study Austrian economics.

Study Bitcoin.

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