The European Central Bank kept interest rates steady at 2%, signaling a pause in the rate cutting cycle. ECB President Christine Lagarde cited easing price pressures and global uncertainties. Markets expect one more rate cut this year. The decision was widely expected, with inflation around the 2% target.

ECB officials remain cautious about future rate cuts, emphasizing a data-dependent approach. Markets reacted positively to the decision to hold rates steady. Analysts believe the 2% interest rate is reasonable and supportive of businesses. The ECB did not provide explicit guidance on future rate changes.

Key ECB interest rates as of June 11 are: Deposit facility rate at 2.00%, Main refinancing rate at 2.15%, and Marginal lending facility at 2.40%. The decision to hold rates follows a quarter-point cut in June. Other central banks, like the US Federal Reserve and Bank of England, kept rates steady.

Analysts speculate on the end of the rate-cutting cycle, with uncertainty about future rate changes. ECB officials stress the need for flexibility amid trade disputes. Markets may shift focus from rate cuts to potential rate hikes. The ECB’s decision reflects a balance between economic resilience and inflation risks.

The ECB views the euro’s strength positively, reflecting Europe’s growth outlook. Analysts believe the stronger euro won’t prompt immediate action from the central bank. Market reaction to the currency remains cautious. The exchange rate is monitored for its impact on inflation.

Rate cuts impact investors differently, with equity markets rising on anticipated cuts. Lower interest rates boost bond prices but reduce savings account rates. Borrowers benefit from cheaper consumer debt and mortgages. The ECB’s decision has implications for various asset classes and financial products.

Read more at Morningstar: ECB Holds Interest Rates as US Tariff Deadline Looms