According to analysts surveyed by Bloomberg, the European Central Bank (ECB) is expected to cut borrowing costs for the eighth consecutive time at its upcoming meeting. They believe the move will be driven by worsening inflation and economic outlooks, fueled by disruptions in global trade due to US trade policies.
Analysts expect the ECB to cut its deposit rate by 25 basis points to 2%. Further policy easing is likely in September, once US trade negotiations wrap up and updated economic forecasts are released. These projections will guide the central bank’s next moves, though Bloomberg cautions that US President Trump’s unpredictability is muddying the outlook.
ECB policymakers are signaling that the rate-cutting cycle may be nearing its end. Executive Board member Fabio Panetta noted the eurozone's disinflation process is approaching completion, suggesting the central bank will likely pause in July. However, Bloomberg analysts warn that prolonged inaction could be interpreted by markets as a full halt to monetary easing.