From Yahoo Finance: 2025-04-17 12:26:00

The European Central Bank cut rates by 25 basis points to 2.25%, citing trade tensions impacting the economy. The decision was unanimous as policymakers showed serious concerns over economic risks. Traders now predict a 75% chance of a June rate cut and expect around 65 bps of rate cuts by year-end.

Market reactions to the ECB’s dovish message included a fall in government bond yields and a weakening euro. Inflation concerns remain uncertain due to tariffs, with the euro strengthening against the dollar and oil prices dropping. Some economists predict inflation below the ECB’s target, posing a challenge for policymakers.

Estimates on the ECB rate outlook vary widely, with some expecting further interest rate cuts in June while others are cautious due to economic indicators. Market analysts are divided on the extent of rate cuts, with some neutral on European bonds and others expecting more cuts than the market anticipates. Some foresee potential recession and a need for significant ECB intervention.

Read more: Markets see door wide open for more ECB rate cuts on tariff hit