A global market meltdown and a decelerating economy could shake the steel nerves of the European Central Bank, analysts said Tuesday, as more observers are predicting it will cut borrowing costs as soon as the second quarter of this year.

The ECB has kept its benchmark interest rate on hold at 4 percent since last June _ before August’s credit crisis froze bank lending and threatened to stall major economies.

Its refusal to cut rates _ and encourage reluctant banks to give credit to each other, to companies and to homebuyers _ stood in stark contrast to the U.S. Federal Reserve which in a surprise move Tuesday reduced its rate for the fourth time since last September.

The Fed slashed its benchmark refinancing rate to 3.5 percent from 4.25 percent as stock markets dropped sharply Monday on investor skepticism that the U.S. government’s multibillion-dollar (-euro) tax relief plan could save the U.S. from a possible slide into recession.

But, until recently, ECB President Jean-Claude Trichet has talked instead about raising rates as the 15 nations that share the euro saw inflation spiral in the last two months to match an all-time high.