Overview

• On June 5, the ECB reduced its deposit rate by 0.25 percentage point to 2.0%, marking the eighth cut since mid-2024.
• Bundesbank President Joachim Nagel called the latest reduction appropriate and said the bank has now reached a neutral level that neither restricts nor stimulates growth.
• Eurozone inflation fell to 1.9% in May, dipping below the ECB’s 2% medium-term target for the first time.
• Lower interest rates are making loans more affordable and reducing returns on savings accounts.
• The ECB will review economic data and trade-dispute developments before its next policy meeting in July.