From Yahoo Finance: 2025-06-05 08:21:00

The European Central Bank lowered interest rates for the eighth time in a year, citing controlled inflation and dimming economic prospects due to potential trade wars with the U.S. The rate was lowered from 2.25% to 2.0%, seen as a neutral level. The ECB remains open to all options for future meetings.

Euro zone inflation has hit the ECB’s 2% target, allowing the bank to focus on the region’s slow growth outlook worsened by Trump’s tariff threats. The ECB noted the potential for increased government spending, which could offset the negative impact of trade policies on business investment and exports.

In response to the economic challenges, the ECB also reduced the interest rates at which banks can borrow at its auctions. The move aims to support growth over the medium term as uncertainty looms. All eyes are now on ECB President Christine Lagarde’s upcoming press conference for further insights.

Read more: ECB cuts rates for eighth time amid trade war risk