Overview

• The European Central Bank reduced its deposit facility rate by 25 basis points to 2.25%, marking its seventh rate cut since June 2024.
• The ECB removed language describing its policy stance as 'restrictive,' signaling a shift toward a more neutral or potentially accommodative approach.
• Rising trade tensions, driven by U.S. tariff policies, were highlighted as a significant factor weighing on eurozone growth and financial conditions.
• Eurozone inflation has fallen to 2.2%, aligning closely with the ECB’s target, while economic growth remains sluggish.
• The ECB reiterated its data-driven, meeting-by-meeting approach to future policy decisions, leaving open the possibility of further easing.