US EditionEurope's Central Bank Expected to Lower Interest Rates as Trump's Trade War Threatens Growth
- The European Central Bank is anticipated to reduce its key interest rate by 25 basis points to 2% during its meeting on Thursday in Frankfurt, Germany.
- This move comes as inflation fell to 1.9% in May and economic growth remained sluggish at 0.3% in the first quarter of 2025 amid trade tensions with the U.S.
- Analysts including Jack Allen-Reynolds and reports from BofA Global Research highlight that the ECB will retain a meeting-by-meeting approach and may signal openness to rates below 2% without explicit guidance.
- Markets priced in a 99% chance of the cut according to LSEG data, which would lower borrowing costs for consumers and may cause banks to reduce interest rates on savings accounts, as Bas van Geffen explained.
- The expected rate cut and ongoing uncertainty suggest the ECB aims to support growth while maintaining policy flexibility amid a highly uncertain economic outlook in Europe.
68 Articles
68 Articles
The European Central Bank (ECB) complies with the expected script and announced on Thursday a further reduction in interest rates to stimulate the Eurozone economy. While the activity in the region endures the type, the trade war unleashed by Donald Trump with its massive tariffs (its last decision has been to double them to imports of steel and aluminum to 50%) and geopolitical tensions represent a very high focus of uncertainty that is already…
Colorado Springs Gazette
Europe's central bank expected to lower interest rates as Trump's trade war threatens growth
Lower inflation and concern that U.S. President Donald Trump’s trade war will slow already modest growth have cleared the way for the European Central Bank to cut interest rates at Thursday’s policy meeting, a step that would lower borrowing costs…
In addition to the trade dispute between China and the US, the ECB's interest rate decision is today the most important issue on the stock exchanges. Investors expect a further reduction in interest rates, and the DAX should remain silent until then.
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