ECB Minutes Reveal October Rate Cut as a Hedge Against Downside Risks

According to the minutes of the European Central Bank's (ECB) Governing Council meeting held on October 16-17, policymakers concluded that the rate cut implemented by the ECB last month was an insurance move against downside risks to both growth and inflation.

The ECB minutes stated, "Taking action now could provide insurance against downside risks that might lead to remaining below the target in the future and could support a soft landing."

The minutes also mentioned, "If the slowdown indicated by economic activity indicators and the downside surprise in inflation prove to be temporary, the decision to cut rates now might, ex post, simply appear as having brought forward the reduction planned for December."