The European Central Bank is expected to keep interest rates steady on July 24 due to stable inflation and political uncertainty. Trade tensions with the US and a stronger euro increase disinflationary risks, potentially prompting rate cuts in September. ECB officials have signaled a pause in the rate-cutting cycle, citing manageable inflation and ongoing geopolitical and trade tensions. Economists expect a quiet July meeting with a potential rate cut in September. The ECB is closely monitoring wage growth and underlying inflation, with recent data showing inflation around the 2% target. The euro’s strength and potential disinflationary effects are being closely watched by the ECB, with officials noting the currency’s manageable strength and potential benefits for the eurozone. Interest rate cuts can impact investors differently, with equity markets typically rising on anticipated cuts, bond markets seeing higher prices, and savings account rates falling while borrowers benefit from cheaper debt.

Read more at Morningstar: What to Expect on July 24