Frankfurt lowered borrowing costs by further quarter point (0.25 of a percentage point) on Thursday, reducing its main deposit rate to 2.5 per cent, a move that had been flagged in advance. It was the ECB’s sixth rate cut since last July but market commentators suggested it may be the last easy decision, given the uncertainty now coursing through the global economy. The imminent threat of a trade war with the US also complicates matters. Policymakers also see a growing chance of an April pause before they lower rates again, once there is greater clarity about trade and fiscal policy, sources told Reuters. “This environment requires a deft hand on the monetary policy lever and the preservation of policy optionality,” he said.

Source: The Irish Times March 06, 2025 20:56 UTC