ECB Cuts Interest Rates Again to Face Global Uncertainty

The European Central Bank (ECB) has once again cut its interest rates to address global uncertainty. For the seventh time, the ECB reduced its main deposit rate by 0.25 percentage points to 2%, aiming to lower the cost of borrowing and stabilize the Eurozone economy.

The cut follows pressure from US President Donald Trump's tax actions, which have created downward pressure on prices, leading to a reduction in inflation forecasts. The ECB's goal is now to keep inflation near 2%.

ECB President Christine Lagarde highlighted growing signs of strength in the Eurozone economy, despite the challenges posed by the US trade war and other global uncertainties. She stated, "We are in a good position to lead through upcoming uncertainties."

The ECB has kept its 2025 economic growth forecast unchanged at 0.9% and has noted that inflation is now close to the 2% target. Analysts suggest that the ECB’s rate cut signals a "summer break," with further cuts possibly expected in September.

This decision contrasts with the US Federal Reserve, which recently kept its rates steady. Lagarde also rejected suggestions to shorten her term after discussions about her leadership of the World Economic Forum, stating, "I am fully committed to completing my mission."