Sheng Yuhau, Global Market Strategist for the Asia-Pacific region (excluding Japan) of Jingshun, expressed his views on the European Central Bank's interest rate cut. Last week, the European Central Bank and the Bank of Canada lowered their policy rates. The current characteristics of this phase of the cycle are a combination of inflation resistance and improving growth, making it more favorable for the markets. Undoubtedly, although inflation in many economies is still above target levels, it has begun to decline from highs, with inflation in the euro area and other regions having dropped to a level sufficient to warrant interest rate cuts by the European Central Bank. It is worth noting that the path to the medium-term inflation target for the European Central Bank is becoming clearer. While last week's shift in European monetary policy is unlikely to impact the future interest rate path of the Federal Reserve, it will certainly signal a loosening of policy, especially for emerging markets and the Asia-Pacific region. The bank stated that the ECB may cut interest rates twice more this year, and growth and inflation forecasts are worth watching. Last week, the European Central Bank initiated a rate-cutting cycle, lowering the deposit rate from 4.0% to 3.75%. This is not the start of an aggressive rate-cutting cycle, and there may only be two more rate cuts for the rest of the year. The next rate cut is unlikely to occur before September. While the market may focus on the rate cuts themselves, the latest growth and inflation forecasts released by the European Central Bank are worth paying attention to. The average forecast for core inflation and overall inflation rates in 2025 is 2.2%, higher than the previous forecasts of 2.1% and 2.0%, respectively. In terms of growth, the European Central Bank currently predicts a 0.9% increase in GDP this year, higher than the previous forecast of 0.6%. The wording in the policy statement is slightly hawkish, with the European Central Bank stating that they "will not pre-commit to a specific rate path," which is the reason for the rebound in German government bond yields. It is expected that the European Central Bank hopes to signal that a rapid rate cut is unlikely this year. The bank believes that if there are signs of weakness in the labor market, the Fed is likely to initiate rate cuts. Due to the still strong labor market conditions, the path to inflation resistance in the United States is slow and complex. Given the Fed's inflation aversion sentiment, the level of employment in the United States is key to determining when rate cuts can be expected. Although the Fed may need to see inflation decline for several consecutive months before cutting rates, once signs of weakness in the labor market appear, the Fed is likely to initiate rate cuts. Although last week marked the beginning of a global easing cycle, the Fed is likely to begin easing later this year, but the biggest question is what the new normal for interest rates will be. While the path to this new cycle has become clearer recently, it is still difficult to imagine a return to pre-pandemic levels. Global economic growth, inflation, and interest rates are gradually returning to normal, but the level to which they will recover remains to be seen.