Yannis Stournaras and Francois Villeroy de Galhau consider ECB rate cut cycle to be over

Yesterday, the European Central Bank (ECB) cut deposit rates in the eurozone for the eighth time since June 2024, lowering borrowing costs to 2%, Bloomberg reports. ECB Governing Council member Yannis Stournaras stated that the cycle of monetary policy easing in Europe is nearing its end. While some experts agree with him, others predict only a pause in July.

Despite the recent positive inflation dynamics, the outlook remains uncertain. According to Bank of Estonia Governor Madis Muller, consumer price growth in Europe is approaching the regulator's 2% target. However, he noted that the region's economy still needs support due to the negative impact of US tariff policies.

Bank of France Governor Francois Villeroy de Galhau's forecasts are now the most optimistic. He believes that Europe, and France in particular, has won the battle against inflation. He is also less pessimistic about the impact of Donald Trump's import tariffs on the region's economy, unlike some experts. According to the official, the US president's trade restrictions would harm the US economy more severely by accelerating domestic inflation.