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5mo ago

ECB Cuts Rates to 2.25% as U.S. Tariffs Deepen Economic Uncertainty

The European Central Bank's seventh rate reduction since June 2024 aims to stabilize growth and sustain disinflation amid escalating trade tensions initiated by the U.S.

La présidente de la Banque centrale européenne Christine Lagarde, lors d'une conférence de presse, à Francfort, le 6 mars 2025
Côté pile, «le processus de désinflation est en bonne voie», se satisfait l’institution dirigée par Christine Lagarde.
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Overview

  • The ECB lowered its deposit rate by 0.25 percentage point to 2.25% on April 17, 2025, marking its seventh cut in less than a year.
  • The decision was driven by worsening eurozone growth prospects due to trade tensions stemming from U.S. tariffs imposed earlier this month.
  • ECB President Christine Lagarde acknowledged that the trade war disrupted earlier plans to pause rate cuts, citing exceptional economic uncertainty.
  • Disinflation remains on track toward the ECB's 2% medium-term target, with inflation slowing to 2.2% in March across the eurozone.
  • The U.S. Federal Reserve has resisted political pressure from President Trump to cut rates, diverging sharply from the ECB's easing stance.