ECB lowers interest rates by 25 bp as inflation forecast revised down

The European Central Bank (ECB) on Thursday made another rate cut of 25 basis points and revised its inflation forecast down in its latest staff projection.

The rate on the deposit facility has been brought down to two percent, and the rates on the main refinancing operations and the marginal lending facility have been cut down to 2.15 percent and 2.4 percent, respectively.

"Most measures of underlying inflation suggest that inflation will settle at around the Governing Council's 2 percent medium-term target on a sustained basis," said the ECB in a statement.

According to its staff projections in June, the ECB sees the inflation in the euro area to be two percent in 2025, 1.6 percent in 2026, and two percent in 2027. The projections for 2025 and 2026 have been revised down by 0.3 percentage points compared with the March forecast.

It is worth noting that the inflation would undershoot the ECB target in 2026 should the projections materialize.

Against the backdrop of decreasing inflation, the rate cut on Thursday was in line with expectations of the market.

The ECB slightly adjusted its growth projections for the euro area, now expecting real gross domestic product to expand by 0.9 percent in 2025, 1.1 percent in 2026, and 1.3 percent in 2027. The 2026 forecast was revised down from a previous estimate of 1.2 percent, reflecting a more cautious outlook amid persistent economic headwinds.

The central bank warns that the high uncertainty stemming from the trade tensions brought about by the U.S. trade policies will subject its inflation and growth projections to volatility.

Both inflation and growth will be lower than the baseline projections if trade tensions escalate further, said the ECB statement, citing a scenario analysis by the ECB staff.

Looking ahead, the ECB once again excluded any particular rate path, saying that its monetary policies in the future will be decided meeting by meeting.

Since June 2024, the ECB has made eight rate cuts, totaling a two percentage point reduction of the key interest rates.

ECB lowers interest rates by 25 bp as inflation forecast revised down

The United States cannot legitimize an operation that attacked Venezuela and captured its president, a Chinese scholar said Sunday.

On Saturday, the United States launched a large-scale strike on Venezuela, during which Venezuelan President Nicolas Maduro and his wife were 'captured and flown out of Venezuela' according to a post by U.S. President Donald Trump on his Truth Social account.

Teng Jianqun, director of the Center for Diplomatic Studies at Hunan Normal University, said in an interview with China Global Television Network (CGTN) that the aim of this operation is to take full control of Venezuela’s natural resources.

"I don't think the United States can legitimize this operation to take custody of the president of Venezuela. And also I don't think the United States can legitimize its any action in taking the oil reserves of that country. This is actually a very dangerous game played by the Trump administration. And of course, the United States would like to take full control of that country and to take full control of the natural resources, especially the large reserve of oil in Venezuela," said Teng.

Teng said Venezuela is not an isolated case but a common practice by the United States. The United States launched an invasion of Panama on Dec. 20, 1989, which continued until January 1990, with the stated objective of capturing Panamanian strongman Manuel Noriega on charges of drug trafficking and organized crime.

"We still remember the so-called sentence of the former president of Panama in the late 1980s. And this time, the president of Venezuela will be under some judicial condition (judicial proceedings) for the so-called drug trafficking and some other crimes. So I think this is not a single case for the Venezuela country, but also this is actually a practice by the United States -- to use force, to use so-called justice under law against any leaders in Latin America and the Caribbean waters," he said.

US cannot legitimize operation against Venezuela: Chinese scholar