Overview

• The ECB delivered its eighth straight rate cut, lowering the key deposit rate to 2% as inflation returned to target.
• Most policymakers, including Martins Kazaks, support a pause in July to maintain flexibility in the face of sluggish eurozone growth and trade uncertainty.
• The Bank of Russia surprised markets by cutting its key rate from 21% to 20%, its first reduction since September 2022, in response to easing inflationary pressures.
• Russian inflation eased below 10% in May with consumer prices rising 3.39% year-to-date, prompting the central bank to emphasize data-dependent future decisions.
• Both central banks stress that further policy steps will hinge on incoming economic data and evolving risks to price stability.