ECE

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The European Central Bank has reduced its benchmark by a quarter of the item to 2.25 percent as it is preparing for economic cases from the US President Donald Trump.

The cut Thursday, which brings the costs to borrowing into the currency block to the lowest in two years, was widely expected after Trump’s announcement tariffs On April 2 in most US trading partners.

“The forecast for growth has deteriorated from the growth of tensions in trade,” the ECB comments said in the comments accompanied by the rate. It adds that “the adverse and changing market response to trade tensions is likely to have increased exposure to financing conditions.”

But it has fallen since last month, which was mentioned that the monetary policy is becoming “less restrictive” that some have seen as a hint that there may be less space in the future to reduce tariffs.

Pooja Kumra, TD Securities strategists, said the ECB language change appeared to be hawthorn, but also emphasized the bank’s warning on risks of growth, adding: “It feels that it is a balanced act between hawks and steams.”

On the eve of the decision, Trump compared ECB speed record with the US Federal Reserve, which supported the rates at the last meeting in March.

Trump said Fed Chairman Jay Powell, who warned on the impact of tariffs on growth and inflation on Wednesday, was “always too late and wrong” and his “termination cannot come soon enough!”

A EkbThis week this week is the seventh reduction as it started to reduce the deposit rate last June.

Traders adhered to their rates for at least two subsequent reductions by the end of this year, depending on the levels that follow in the Swaps markets after the decision.

The euro changed little at $ 1.135 immediately after the reduction.

Last week, Trump conducted a partial reversal, delaying its full “mutual tariffs” of 20 percent of the EU goods for 90 days, during which time will apply 10 percent. But the leading central bankers say his protectionist policy can still become a negative economic shock for the eurozone.

The ECB is already faced with slow growth and cooling pressure. In March, the Central Bank reduced its growth forecast in 2025 for the euro area to 0.9 percent – the sixth in a row.

Last month, inflation decreased to 2.2 percent – slightly higher than the 2 percent target of the ECB – since the prices for services increased at their slowest pace of almost three years.

Economists say inflation may be reduced further than the fall in oil prices this month, the recent euro growth against the dollar and the potential surge of Chinese imports into the eurozone. All three developments are widely regarded as the consequences of Trump’s trade policy, at least in part.

But the increase in the costs funded by debt in Germany and other places in the eurozone may be inflation.