Central Banks Tackle Inflation and Growth Challenges

The US Federal Reserve faces the challenge of high inflation amid stable economic conditions and is keeping the interest rate constant, while market expectations had anticipated cuts. Political risks could slow US economic growth. In contrast, the European Central Bank cut the interest rate for the seventh time in April and plans further cuts due to decreasing inflation risks and weak growth forecasts. Global economic outlooks vary significantly: The US expects GDP growth of 2.1 percent, while the euro area could register only 0.5 percent growth. China’s growth is projected at 4.5 percent. A decline in world trade could significantly impact the European economy.