On the way to the last successive reduction of interest rate by 0.25 of the unit lies the European Central Bank (ECB).
Based on today, the next interest rates is expected to take place in June to follow a period of cessation in order to assess the results of monetary policy in the course of inflation and the European economy, under the light of the developments on the duties front.
This means that the ECB’s main interest rate will be reduced to 2% from 2.25% today, moving to the level of neutrality of monetary policy.
According to European sources, the assessment of Frankfurt’s staff is that the course of inflation in the eurozone remains down to 2% as a result of the policy of gradual staunch interest rates, while giving breaths to the European economy at a time when growth remains.
In the coming months, the landscape is expected to clear up on the ongoing duties and negotiations between the European Union and the United States, so there will be a clearer picture of the scope of their impact on the European economy.
In the first quarter of 2025 the eurozone was developed at a rate of 0.4%, which, although higher than the initial forecasts, reflects the levels of weak growth in which the European economy is moving.
Germany during this time was developed at a rate of 0.2% from a 0.2% shrinkage in the previous quarter, while France scored 0.1% marginal growth
A first general assessment of the monetary policy pursued in recent years made the ECB last weekend in Porto, Portugal, where the central bankers of the Eurosystem gathered.
At this gathering, a comprehensive evaluation of the policy pursued by the ECB from the high inflation that emerged from the crowning crisis and Russia’s invasion of Ukraine to date.
The central conclusion of the rally was that the ECB gradually proceeded to careful interest rates in the first phase of the inflation crisis, avoiding a sharp increase in interest rates which would have a significant negative impact on the European economy at this stage. This policy was based on the evaluation verified along the way, that high inflation of previous years was not demanding inflation, which could be limited by very strict monetary policy, but inflation of supply that came from the two crises related to the coronary pandemic and the war in Ukraine.
Thus, as it was found at the meeting of European central bankers, the mild influence of monetary policy on the European economy then allowed the restricted gradual interest rates.
Source: RES-EIA