ECB cuts rates on weak growth, markets bet on more easing

Written by Francesco Kaiba and Blaz Korrani

Frankfurt (Reuters) – The European Central Bank reduced interest rates for the seventh time a year on Thursday and warned that economic growth will achieve great success from the American definitions, which enhances bets for more policy in the coming months.

The European Central Bank has reached the costs of borrowing to its lowest level since late 2022, as high overburden inflation has disappeared significantly and rapid change changes to SAP commercial policies confidence in SAP business and growth pressure.

“The negative risk of economic growth increased,” Lagarde said at a press conference after politics agreed to reduce a reference rate for the European Central Bank by 25 basis points to 2.25 %.

“The main escalation of global trade tensions and associated doubts will reduce the growth of the euro area by reducing exports, and may lead to low investment and consumption.”

While Lagarde gave almost nothing about the following moves of the bank, politicians who insist on deciding a meeting separately, some of its colleagues said that the tape to get more cuts is low.

The sources speaking to Reuters, provided that its identity was not disclosed that the reduction in June was still very possible and that a major mitigation in trade tensions would persuade them to stop.

The markets have also taken Lagarde warnings about the risks of growth as a sign that more mitigation will be necessary and pricing in other or three discounts before borrowing cost a bottom.

“We are convinced that there are more discounts in the coming prices,” said economist Carsten Barzeeski. “The European Central Bank has increased clearly.”

“However, everyone should now know that the price cuts alone will not protect the economy of the eurozone against the current historical changes and challenges.”

However, Lagarde insisted that the conservatives maintain an open mind and that the sources inside the room said that the ruling council was balanced on Thursday. Unlike some previous meetings, there was no clear domination either by “hawks” or “doves”.

Lagarde also reduced the importance of the European Central Bank’s decision to delete the last reference in its usual statement to interest rates that restrict economic growth.

While Trump has temporarily stopped most of the customs duties at the present time, many of them remain in place, and the fluctuations in financial markets have already damaged the economy.

Lagarde said that the European Central Bank will not be completely clear by its next meeting in early June, as it was before the end of Trump’s freezing for a period of 90 days that he put on his tariff – by 20 % for the European Union.