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ECB cut its deposit rate by 25 bps points to 2.25% as widely expected, but the more notable shift came in the tone of its accompanying statement. ECB completely removed the reference to its policy stance being “restrictive,” a phrase that had previously signaled a bias toward further monetary easing. This change suggests policymakers believe […]

The post ECB cuts rates to 2.25%, drops “restrictive” language amid mounting uncertainty appeared first on Action Forex.

17 April 2025 The Governing Council today decided to lower the three key ECB interest rates by 25 basis points. In particular, the decision to lower the deposit facility rate – the rate through which the Governing Council steers the monetary policy stance – is based on its updated assessment of the inflation outlook, the […]

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First of all, I think all the talk about the Fed losing independence can be ignored. It’s not going to happen. The chances are so low that it doesn’t even deserve the attention.

But let’s say it does happen, what would be the consequences?

Well, pretty much pure chaos. The extent of the damage to the economy cannot even be imagined.

Inflation expectations would de-anchor immediately, even if actual inflation stayed the same. The government would certainly pursue expansionary policies and that would increase inflation.

The US Dollar and US Treasuries would be avoided like the plague. Gold would literally rise “to the moon”. The stock market would experience the worst bear market in history. And the great recession and depression would be seen as nice periods in comparison.

The US Congress would never allow this to happen because there’s even no way back. There would be always the spectre of this happening again and the damage would be everlasting.

This article was written by Giuseppe Dellamotta at www.forexlive.com.