Market history · Central banks ·
The ECB makes its first rate cut since 2019
On 6 June 2024 the European Central Bank cut its key interest rates by a quarter of a percentage point, taking the deposit rate from a record 4% to 3.75%. It was the first cut since 2019 and came ahead of the US Federal Reserve.
Analysts described it as a 'hawkish' cut: the bank made clear that it was not committing to a series of reductions and would depend on the data. The move showed that major central banks were not necessarily in step, which matters for currencies and for the relative attraction of bonds in different markets.
The takeaway
Central banks do not move together. A cut in one region and a hold in another changes currencies and bond yields between them.
Sources
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