The European Central Bank (ECB) has decided to cut its three key interest rates by 25 basis points in an effort to reach its inflation target of 2%. The rate cuts are expected to take effect on February 5, 2025. However, borrowing is still not easy for businesses and households as existing loans are being rolled over at higher costs. The ECB confirmed that monetary policy remains restrictive for now, but they believe that as people's incomes improve and the effects of rate hikes fade, demand will pick up. The ECB's balance sheet is also getting leaner as it reduces asset purchases. Additionally, the ECB's Governing Council emphasized that rate adjustments will be based on economic and financial data. ECB President Christine Lagarde announced that Bitcoin will not be included in any central bank's reserves, stating that central bank reserves should be liquid, secure, and safe. The Czech National Bank rejected the idea of investing in cryptocurrencies, while Poland and Romania's central banks also dismissed the inclusion of digital assets in their reserves. In the US, Federal Reserve Chair Jerome Powell expressed support for banks providing crypto services to clients during a press conference.



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