ECB Plans Stable Rates Through 2026 Amid Eurozone Resilience, Fed Opposition to December Cut

The European Central Bank (ECB) has maintained its interest rates at 2% for the third consecutive meeting, signaling a pause amidst economic resilience and receding risks in the Eurozone, with Barclays now forecasting no further rate cuts before the end of 2026. The ECB continues to show uncertainty on the duration of this policy stance, emphasizing its primary mandate to maintain price stability. Meanwhile, the U.S. Federal Reserve has begun lowering interest rates for the first time recently, cutting rates by 0.25 percentage points, a move supported by President Donald Trump who has pushed for rate reductions to stimulate the economy. However, Dallas Federal Reserve President Lorie Logan expressed opposition to the recent rate cut and any further reductions in December, citing a balanced labor market and persistent inflationary pressures above the Fed's 2% target. The contrasting monetary policies between the ECB and the Fed reflect differing economic conditions, with the ECB holding steady in light of Eurozone resilience and the Fed cautiously responding to early signs of economic weakness and inflationary concerns exacerbated by trade policies. These developments impact global capital flows and currency valuations, with lower U.S. rates boosting European stocks and influencing investment decisions.