Overview

• The European Central Bank lowered its benchmark rate to 2.25%, marking the seventh cut in a year, and indicated more reductions may follow.
• U.S. Federal Reserve Chair Jerome Powell reaffirmed the Fed's decision to hold rates steady since December 2024, citing concerns over tariff-driven inflation risks.
• President Trump's proposed tariffs of 10% to 49% on global trading partners, temporarily suspended for 90 days, have created significant economic uncertainty.
• European officials are particularly concerned about the potential impact of a proposed 20% tariff on European exports, including autos, which could slow growth further.
• The divergence between the ECB's aggressive rate cuts and the Fed's cautious stance underscores differing economic conditions and responses to trade tensions.