The European Central Bank (ECB) has maintained its main interest rate unchanged, following a similar decision by the Federal Reserve. This move brings an end to a streak of eight consecutive quarter-point rate cuts by the ECB since June.
In a statement, ECB President Christine Lagarde cited the bank’s past rate cuts as a factor in its decision, stating that the economy has proven resilient despite a challenging global environment. However, she emphasized that the current situation remains “exceptionally uncertain,” particularly due to ongoing trade disputes.
The latest inflation data shows the euro area’s price growth at 2%, which is in line with the ECB’s target but higher than the previous month’s rate of 1.9%. Economic growth also picked up to 0.6% in the first quarter, compared to 0.3% in the last three months of 2024.
Lagarde reiterated that the bank is not committing to a specific interest rate path and instead plans to “watch how events develop.” Investors now see only a 50% chance of another rate cut by the end of the year, down from previous expectations of full price reductions.
Source: https://www.barrons.com/articles/fed-ecb-interest-rate-decision-trump-87329b7d