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European Central Bank signals possible rate cut

Posted at 10:02 PM, Jul 24, 2019
and last updated 2019-07-25 07:55:05-04

FRANKFURT, Germany (AP) — The European Central Bank is signaling it could cut interest rates or restart bond purchases in coming weeks to support weakening economy growth in the face of tensions over trade.

The bank changed its policy statement after a meeting Thursday by saying that rates will remain at current record lows “or lower” through the middle of 2020. Adding the words “or lower” emphasizes that the next move could be down. The bank also tasked its staff to study a possible new round of bond purchases.

The central bank halted a 2.6 trillion-euro bond-buying program last year, saying inflation was headed sustainably toward its goal of just under 2%. But indicators have become weak as the U.S.-China trade conflict weighs on the economy of the 19 countries that use the euro.