Ben Emons, founder of Fed Watch Advisors, explains why the European Central Bank is diverging from the Federal Reserve when it comes to monetary policy.

U.S. President Donald Trump is getting his wish that interest rates drop across the world, just not at home where a strong economy and uncertainty over his own policies have set the stage for the Federal Reserve to diverge from its central bank peers.

The central bank cut rates by a quarter point, as it rushes to brace a stagnant economy against President Trump’s threatened tariffs.

The ECB (European Central Bank) continued policy normalisation today, with another 25 basis points (bps) worth of cuts across all three benchmark rates. This marks the fourth consecutive rate reduction, bringing the Deposit Facility Rate, the Refinancing Rate, and the Marginal Lending Facility Rate to 2.75%, 2.90%, and 3.15%, respectively.

The ECB is expected to cut rates by 25bps to 2.75% on Thursday as inflation nears 2% and growth remains weak. Analysts see further cuts in 2025, but US trade tariffs could add uncertainty.

Eurozone rate-setters are set to cut borrowing costs again this week, confident their efforts to lower inflation will remain on track despite the threat from US President Donald Trump's protectionist agenda.

Despite US President Donald Trump's sabre-rattling, the European Central Bank is set to press on with interest rate cuts Thursday as officials increasingly voice confidence that the fight against inflation is on track.

WASHINGTON - US President Donald Trump is getting his wish that interest rates drop across the world, just not at home where a strong economy and uncertainty over his own policies have set the stage for the Federal Reserve to diverge from its central bank peers.

The European Central Bank lowered its key interest rates by 25 basis points on Thursday, bringing the deposit facility rate to 2.75%, as the disinflation process remains “well on track” while the economy showed an unexpected stagnation during the last quarter of the year.

The European Central Bank cut interest rates on Thursday and kept the door open to further policy easing as concerns over lacklustre economic growth supersede worries about persistent inflation. It was the fifth ECB rate cut since June and markets expect two or three more this year,

The European Central Bank is cutting its key interest rate, a step to boost an economy that’s struggling to grow as consumers burned by inflation warily eye price tags and businesses try to chart a course amid political turmoil in leading economies