The European Central Bank has reduced interest rates for the seventh consecutive time since last June, cutting the deposit rate by a quarter-point to 2.25% as anticipated by most analysts.
The ECB has notably removed the word “restrictive” from its policy stance description, suggesting rates are now considered neutral rather than constraining economic activity.
This rate cut comes directly in response to President Trump’s recent announcement of sweeping tariffs, which has shifted the ECB’s focus back toward continued monetary easing.
President Christine Lagarde warned that these trade tensions pose significant downside risks to economic growth, potentially dampening exports and negatively affecting investment and consumption across the eurozone.