They aimed to curb inflation without wrecking the economy—ended up with inflation and destruction.

The ECB *cut* their target interest rate today, yet simultaneously *raised* inflation projections. Why?
Because they cornered themselves with big talk about progress heading into this meeting. But more importantly, Central Banks *need* inflation to manage the gigantic debt piles… pic.twitter.com/GOO5cSFlf3

— James Lavish (@jameslavish) June 6, 2024

Inflation Trends:

Canada, Europe Cut Spending.

Is America Next? pic.twitter.com/NHYLznqcBb

— Wall Street Silver (@WallStreetSilv) June 7, 2024

• Inflation Projections:
  • Despite the rate cut, inflation has been stronger than expected. In May, prices grew by 2.6% annually, which is above the ECB’s target.
  • Eurosystem staff increased their inflation projections for both 2024 and 2025.
• Why the Cut?:
  • The ECB’s decision to cut rates was influenced by progress on inflation since the previous rate hikes. However, the recent inflation surge may have caught them off guard.
  • It’s worth noting that central banks often use interest rates as a tool to manage economic conditions, including debt levels. Inflation can help reduce the real value of debt over time.