The European Central Bank (ECB) is set to cut interest rates ahead of the U.S. Federal Reserve, marking the eurozone as the largest wealthy economy to begin easing borrowing costs in response to receding inflation following Russia’s invasion of Ukraine.

ECB President Christine Lagarde and other officials have indicated a likely quarter-point rate cut from the current record high of 4% at the upcoming governing council meeting.

Lagarde’s confidence in controlling inflation, along with statements from other ECB officials, has led analysts to expect a rate cut on Thursday.

This shift contrasts with the initial response to the inflation surge, when the Fed raised rates starting in March 2022, followed by the ECB about four months later, The Hill reported.

Major central banks globally are now inclined towards lowering interest rates, with smaller economies already implementing rate cuts.

The Bank of England’s upcoming meeting in June may also consider a rate cut, while Japan has begun raising rates after years of below-zero rates and low inflation.

Written by B.C. Begley