The information provided on EL7.AI is for educational and informational purposes only and does not constitute financial advice.
The information provided on EL7.AI is for educational and informational purposes only and does not constitute financial advice.
As major central banks turn cautious, new data showed Eurozone inflation declined notably in June, supporting expectations that the European Central Bank will refrain from raising its key interest rate this month. The drop was driven by cooling energy prices, according to a Wall Street Journal report. The reading suggests price pressures are fading after the region's energy shock over the past two years.
In contrast, recent U.S. data showed the annual PCE price index rose to 4.1%, above the prior reading of 3.8%, keeping pressure on the Federal Reserve. The divergence between the two economies comes as the ECB published its economic bulletin on June 25, which likely included an inflation assessment. Meanwhile, U.S. first-quarter GDP growth came in at 2.1%, beating forecasts.
Sign in to access this content
Sign InFollowing this data, markets are focused on the ECB's July meeting, where policymakers are widely expected to hold rates at current levels. Investor attention will also be on speeches by ECB officials, including President Christine Lagarde, for clues on the future policy path. Continued disinflation could pave the way for a potential rate cut later this year, though that will depend on energy prices and domestic demand.