The interest rate increases have had their effect

The European Central Bank (ECB) today cut its policy rate by 25 basis points to 3.5%, which was in line with market expectations. The reduction is justified by the ECB as another step towards a reduced tightening of monetary policy.

The ECB chose to leave the forecast for inflation unchanged, but for the so-called core inflation the figures were raised slightly for this year and next year. A stronger upward price pressure than expected in the service sector is the reason, according to the ECB. ECB economists also cut the eurozone GDP forecast to 0.8% growth this year, down from 0.9%. The Swedish stock market and the exchange rate of the Swedish krona against the euro are basically unchanged after the announcement.

However, the most important interest rate announcement for the world economy will be the one that the US central bank, the Federal Reserve (FED), will deliver on September 18. There, too, a reduction of 25 points is expected.

However, a series of unexpectedly weak economic reports in the US have started speculation about a so-called double cut of 50 interest points. Friday's statement by Fed member Christopher Waller quote "Patience is no longer what is required after the latest round of statistics, what is required is action" unquote fueling speculation. The statement was made after a report showed significantly fewer new jobs than expected in the US in both July and August.