Overview

• The ECB lowered its deposit rate to 2% in its eighth cut this year and signalled a pause next month to assess the growth and inflation outlook.
• Euro-zone inflation was 1.9% in May, below the 2% goal, and is projected to ease to 1.6% next year, prompting concerns among some officials that it could slow too much.
• Croatia’s central bank governor Boris Vujcic urged against overreacting to small deviations from the target, arguing prices will rebound as energy costs stabilise.
• ECB policymaker Isabel Schnabel warned that President Trump’s tariffs could act as a global shock by lifting producer prices and feeding through to consumer inflation.
• The bank has launched a long-term strategy review to reconsider the role of quantitative easing and other monetary tools for managing future inflation challenges.