ExclusiveEuropean Central Bank Cuts Rates by 25 Basis Points

The European Central Bank on Thursday cut interest rates for the seventh time in a year, by 25 basis points to 2.25%. The ECB has been lowering borrowing costs as post-pandemic price pressures retreat, and recent trade-related turmoil on global markets is adding to the case for further policy easing. Increased uncertainty is likely to reduce confidence among households and firms, and the adverse and volatile market response to the trade tensions is likely to have a tightening impact on financing conditions, the ECB said. These factors may further weigh on the economic outlook for the euro area. However, ECB President Christine Lagarde is unlikely to offer many clues about the future, sticking instead to her line that uncertainty remains far too great for the bank to commit to anything, and it will decide its next steps as data come in. While US President Donald Trump has paused most tariffs, many remain in place, and the markets and economy are still facing more uncertainty.