Will disinflation lead to eurozone rate cuts?

Data shows that consumer prices in the eurozone increased by 1.9% year on year in May, down 0.3% from last month and below the ECB’s 2% target. Core inflation was also up from last year but down 0.4% in May, compared to the previous month. This disinflationary trend is attributed to lower energy prices, a stronger euro, and decelerating wage growth. However, alcohol, food and tobacco increased from last month to 3.3%. The ECB is expected to cut interest rates by 25 basis points at its upcoming meeting. Analysts anticipate further rate reductions later in the year, with the aim of supporting...