European Central Bank (ECB) officials plan to halt the cycle of interest rate cuts at their next meeting on July 23–24. Bloomberg notes that this decision is due to growing economic uncertainty amid US President Donald Trump's tariff policy.
According to the news agency's sources, the regulator's representatives have contrasting views on the future path of monetary policy. Some believe that cutting borrowing costs has already been sufficient. Others advocate for further easing in September. However, these opinions may change following the outcome of trade negotiations with the US.
On Thursday, the ECB lowered its deposit rate to 2%. Officials emphasized that inflation is currently at 1.9%, close to the target level of 2%. The bank forecasts that consumer prices will rise 1.6% next year and return to the target in 2027.
ING analysts expect the ECB to take a wait-and-see approach to policy changes throughout the summer, unless trade tensions return with renewed vigor at the end of the current 90-day tariff pause or at any other time.