The capping of US/Eurozone tariffs to 15% is reasonable and has given the European Central Bank (ECB) the opportunity to pause. Consequently, the ECB has chosen to maintain its deposit rates at 2% for the third consecutive time since mid-2024.

The ECB looks confident regarding the current inflation levels and has decided not to commit to any specific actions in the medium term; instead, it will remain flexible and base its decisions on the data regarding inflation, assessing conditions on a meeting-by-meeting basis.

Many economists remain skeptical that the cycle of rate cuts has reached its conclusion.

ECB President Lagarde hinted that the ECB might be through with rate reductions, but she was cautious not to fully endorse that notion.

In parallel, the ECB has revised its growth forecast for 2025 upwards to 1.2% from 0.9%, although a slowdown to 1% is anticipated for 2026. This has contributed to a recovery of the European currency. The next ECB meeting is scheduled........

© Business Recorder