ECB seeks to ensure economic stability via rate cuts

Members of the European Central Bank (ECB) expressed confidence in inflation returning to the target level in the medium term, according to the regulator's report on its April meeting. Thus, disinflationary trends are likely to prevail in the region in the near future.

Last month, the ECB cut interest rates for the seventh time since June 2024 and warned of significant risks to economic growth posed by US tariffs. Most ECB members agreed that cutting borrowing costs in advance would provide the economy with needed stability.

At the same time, some officials acknowledged the potential pro-inflationary impact of US tariff policy on the euro area, particularly in the long term. They linked this possibility to deglobalization and trade barriers, which could lead to higher costs for companies.

According to Reuters, global trade tensions have eased considerably since the April meeting. However, uncertainty continues to affect investor sentiment. They anticipate an ECB rate cut next month, which is likely to occur with about a 90% probability. By the end of the year, the deposit rate is expected to reach 1.75%.