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last mo.

ECB set to lower deposit rate to ‘neutral’ 2% in seventh straight cut

Lagarde is responding to inflation dipping below target alongside slowing growth under US tariff pressure

Christine Lagarde, the ECB president, will hold a press conference at 1.45pm
European Central Bank (ECB) President Christine Lagarde speaks to the media following the Governing Council's monthly monetary policy meeting in Frankfurt, Germany, March 6, 2025. REUTERS/Jana Rodenbusch/File Photo
Image
The European Central Bank, right, is pictured in Frankfurt, Germany, Wednesday, June 4, 2025. (AP Photo/Michael Probst)

Overview

  • The ECB will cut its key deposit rate by 25 basis points to 2.0%, marking its seventh reduction since June 2024.
  • Eurozone inflation cooled to 1.9% in May, slipping below the bank’s 2% goal for the first time this year.
  • The ECB is likely to downgrade its growth and inflation forecasts and pause further cuts in July to evaluate the impact of its easing measures.
  • US President Donald Trump’s tariff campaign is cited as a drag on investment and growth, intensifying uncertainty in the eurozone economy.
  • At her press conference, President Christine Lagarde is expected to address policy guidance and reported discussions about leading the World Economic Forum.