ECB Considers Interest Rate Cuts Amid Low Inflation

The European Central Bank (ECB) faces internal divisions regarding economic growth, with some policymakers fearing a recession while others emphasize inflation control. Although eurozone inflation has decreased to 2.2% in August, the ECB is considering further interest rate cuts in its upcoming meeting, following a reduction in June. Meanwhile, the Federal Reserve is also signaling possible rate cuts, with a stable annual Personal Consumption Expenditures (PCE) inflation rate of 2.5% reported for July. Core inflation in the eurozone has slightly dropped to 2.8%, but services inflation has risen due to events like the Paris Olympics. Experts suggest that falling energy prices contributed to the overall decline in inflation rates, while core inflation remains a concern for the ECB. The contrasting approaches to monetary policy reflect the ongoing challenges central banks face in balancing inflation targets with recession risks.