ECB’s Simkus expects two possible rate cuts

In the view of Governing Council member Gediminas Simkus, it is expected that the European Central Bank (ECB) may cut interest rates again. Such measures could be due to the negative impact of tariffs imposed by US President Donald Trump on the economy, as well as a slowdown in inflation in the region.

According to Bloomberg, investors are also predicting at least two more cuts in the deposit rate, which currently stands at 2.25%. Bank of America economists suggest the rate will be cut to 1.25% in December — that's four more steps of 25 basis points each.

Nevertheless, as the head of the Lithuanian Central Bank noted earlier, in the absence of a significant deterioration of the economic situation in the region, a one-time rate cut by more than a quarter of a percentage point will not be required.

Earlier, the International Monetary Fund (IMF) downgraded the eurozone's GDP forecast, also citing new tariffs and tighter financial conditions.