ECB Lowers Interest Rates, Bitcoin and Stock Markets React

• The European Central Bank (ECB) has lowered its interest rate for deposit lending facility by 25 basis points.
• Bitcoin and major stock market indices are slightly up following the ECB's decision.
• The ECB expects core inflation to decline rapidly over the next two years.
• Economic growth projections are weaker than in June due to weak private consumption and investment.
• September has historically been a difficult month for US stocks and Bitcoin.
• Lower interest rates are favored by markets, but higher rates could interfere with the yen carry trade.

Summary :
The European Central Bank (ECB) has lowered its interest rate for its deposit lending facility by 25 basis points, signaling a dovish monetary policy stance. The bank expects core inflation to decline rapidly over the next two years, and its projections for economic growth are weaker than before. Despite this, Bitcoin and major stock market indices have seen a slight increase following the news. September has historically been a difficult month for U.S. stocks, and the same could be true for the Bitcoin market. However, there is optimism for a potential price increase in October, which has historically had the highest average returns for Bitcoin. Lower interest rates are generally favored by markets as they mean cheaper borrowing costs, which can lead to appreciation in assets like Bitcoin, gold, and real estate. Some analysts believe that higher interest rates in Europe and the U.S. could negatively impact markets in the short term by interfering with the yen carry trade. However, if this bearish theory plays out, the Federal Reserve may increase liquidity to rescue the market. Overall, the price of Bitcoin has risen as Federal Reserve Chairman Jerome Powell signals rate cuts in the coming months, and the leading cryptocurrency is currently trading above $58,000.

Sources :

- Decrypt