r/wallstreetbets • u/abishop717 • 1d ago

Discussion 5 rate cuts 😮

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u/d1stor7ed 1d ago

That is not true. Their primary responsibility is to keep inflation at 2%. This is why stagflation is the worst economic configuration.

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u/misspiggy123 1d ago

2% is a somewhat arbitrary target that was established. They can change this acceptable target rate for price stability if the new economy demands it. After all, the current administration is trying to completely alter the global economy….

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u/L4gsp1k3 1d ago

The problem, is that if they choose to change the target, the whole markedet will loose some trust in the central bank.
You can't just change your course because that has always been the target for the economy, and why change it now, and not when the 2% wasn't achievable before, why not change it back then.
ECB has already answer that question, they are not changing course, otherwise they would have done it before.

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u/vitunlokit 1d ago

ECB actually has inflation target as their only set goal.

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u/L4gsp1k3 1d ago

Yes, that's correct. In the EU we have too many people who believe that the stock market is more important than ECBs main goal.