From Morningstar: 2025-05-30 04:27:00

The European Central Bank is expected to cut the deposit rate to 2% on June 5, marking the eighth rate cut in an easing cycle. Inflation in the eurozone is under control at 2.2%. Analysts expect the ECB to lower rates in June and July before pausing. German bank Helaba sees the easing cycle halting after June.

Trade tensions with the US pose macroeconomic uncertainty, but eurozone GDP grew by 0.3% in Q1 and is projected to pick up. The ECB is likely to revise GDP forecasts upwards on June 5, reflecting stronger growth. Manufacturing PMIs are improving, but inflation may be lower than expected in France.

As concerns over US fiscal policy grow, investors are seeking alternatives to the dollar. The euro holds the second position in global currency reserves at around 20%. ECB President Lagarde sees a potential for the euro to strengthen its international role, citing open trade, economic strength, and a stable legal framework as key pillars.

Interest rate cuts can boost equity markets and bond prices, while lowering cash savings rates. The next ECB meetings in 2025 are scheduled for July 24, September 11, October 30, and December 18.



Read more at Morningstar: Will the ECB Cut Interest Rates Again on June 5?