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ECB Delivers Eighth Rate Cut, Deposit Rate Now at 2%

The decision reflects downgraded inflation forecasts driven by lower energy prices and a stronger euro under rising US trade barriers

Siège de la Banque centrale européenne (BCE) à Francfort, en Allemagne, le 17 avril 2025
Christine Lagarde, présidente de la BCE, avait prévenu que les baisses de taux pourraient continuer. (Photo d’illustration)
La BCE a abaissé le taux directeur de 0,25 point pour le faire descendre à 2 %.
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Overview

  • The ECB reduced its key deposit rate by 25 basis points to 2% on June 5, marking its eighth cut since June 2024.
  • Euro-zone inflation fell to 1.9% in May, prompting the bank to lower its 2025 forecast from 2.3% to 2.0% and its 2026 outlook to 1.6%.
  • The institution’s ongoing quantitative tightening program is removing liquidity from markets, partially offsetting the impact of cheaper borrowing costs.
  • The ECB’s easing stance diverges from the US Federal Reserve, which keeps rates above 4% amid persistent inflation pressures.
  • Heightened uncertainty from US tariffs on European steel and aluminium has led policymakers to signal a possible pause in rate cuts when they reconvene in July.