ECB cuts rates for 7th time in a year to support economy amid U.S. tariffs

From Yahoo Finance: 2025-04-17 08:52:00

The European Central Bank cut interest rates for the seventh time in a year to support the struggling euro zone economy amid U.S. tariffs. The euro fell to $1.1339 and Germany’s bond yield remained flat at 1.75%. The STOXX 600 index was down 0.3%. Analysts expect further policy easing due to rising trade tensions and uncertainties.

The ECB’s decision to cut rates was expected, reflecting concerns over growth and trade tensions. U.S. tariffs have increased global growth risks, affecting commodity prices and the Euro. The ECB aims to maintain a neutral stance and adjust policy rates based on data and risks. Market pricing reflects expectations of further rate cuts.

Economists predict another rate cut in June and potentially later in the year as the ECB balances dovish concerns over growth, inflation, and trade conflicts with more hawkish fiscal policies. Uncertainties from trade negotiations could influence future rate decisions. The ECB remains cautious amidst ongoing trade uncertainties.

Analysts note a dovish tone in the ECB’s recent decision, focusing on downside risks to growth due to trade policy uncertainty. The ECB responds to weaker-than-expected inflation data with a 25-bp rate cut, moving interest rates closer to neutral. The possibility of a rate cut in June remains open based on economic developments.

The ECB maintains a cautious stance, keeping options open amid trade uncertainty and deteriorating outlook. Analysts suggest further rate cuts may be necessary to address deflationary pressures and support economic growth. The ECB’s approach reflects a balance between addressing risks and maintaining flexibility in monetary policy.



Read more at Yahoo Finance: ECB cuts rates again to buffer economy from U.S. tariff hit