Europe Central Bank jumps ahead of the Fed in lowering rates. But future cuts may be limited

By DAVID McHUGH
AP Business Writer

FRANKFURT, Germany (AP) — The European Central Bank cut its key interest rate by a quarter-point, moving ahead of the U.S. Federal Reserve as central banks around the world lean toward lowering borrowing costs — a shift with far-reaching consequences for home buyers, savers and investors. The ECB cut its benchmark rate to 3.75% from a record high of 4% at a meeting of the bank’s 26-member rate-setting council in Frankfurt. ECB President Christine Lagarde said inflation had eased enough for the central bank to start lowering rates. But with inflation in the eurozone expected to remain above the ECB’s 2% target into next year, Lagarde declined to say how fast or how deep any future rate cuts might be.