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The ECB's interest rate cuts are expensive for individual investors.



Investment / Market

The European Central Bank (ECB) can "make further" declines in interest rates among other measures that stimulate the economy. This is good news for the borrower. But for savers and creditors …

That was spoken by President Mario Draghi in response to the market for the second time this month. Italian bankers who attended the opening ceremony of the ECB annual seminar in Sintra, Portugal, said: "Key interest rate cuts and mitigation to reduce side effects are still part of our tools. Already at the beginning of June, We discussed the interest rate cut, which stood at historic low since March 2016.

But this ending may have already been known. It caused strong opposition to the stock exchange. Mario Draghi stressed the need for "additional stimulus measures" in the months to October if inflation continues to move slightly below the laboratory's 2 percent target. . Among these tools, Draghi said that there are net short positions in assets held for € 260 billion between 2015 and 2018 and the ECB still has "significant margins".

Donald Trump, "Unfair Benefits to the EU"

US President Donald Trump said that the new proposal by Mario Draghi would give the European Union "an unfair advantage" to the United States. "Mario Draghi announced that the new measure could stimulate the economy (Europe). The euro fell immediately against the dollar, giving it an unfair advantage in competing with the US Mr. Trump. Europeans "have been with China and other people for many years," he added.

"The European market has risen after comments made by Mario D today (unfair to the US)!" The European Central Bank (ECB) president predicted that interest rates would fall further for the second time this month. "Mitigation to reduce key interest rates and side effects is still part of our tools," said Mario Draghi at the opening ceremony of the ECB annual seminar in Sintra, Portugal. It caused a backlash.

What happens to the individual?

If realized this fall, it will have a significant impact on the real economy by facilitating credit access to businesses. For individuals, mortgages and consumer interest rates will soon decline. On the other hand, for the saver, it can be soup on a frown face, the interest rate (close to zero) remaining on the floor and holders of government bonds have the risk of losing some feathers.


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