With a prudent and dependent position of the data, the agency led by Christine Lagarde avoids committing to a clear road map, letting the evolution of the economic and commercial environment determine its course of action.
There were no surprises. European Central Bank (ECB) He met the expectations and reduced the three official interest rates again in 25 basic points, thus marking the eighth cut of this cycle and the seventh consecutive since September 2024.
In detail, the Governing Council decided to set the interest rates of the ease of deposit (DFR), the main financing operations (MRO) and the marginal credit ease (MLF) in 2.00%, 2.15%and 2.40%, respectively, validly as of June 11, 2025.
The ECB also updated its economic forecasts, cutting in three tenths its inflation estimate by 2025 and 2026, after confirming that the index has been moderated until approaching the goal of 2% in the medium term. Specifically, it expects inflation to be in 2% in 2025 and in 1.6% in 2026.
What the European market analyzes
From DWS, Ulrik Kastens warns that the margin to continue cutting is being reduced, and estimates that after the June meeting there could be only an additional cut in July, carrying the 1.75%rate. A similar projection sustains Cristina Gavín, from Ibercaja Management, although with a nuance: he hopes that after June there is a pause in July and a new reduction in September, although without a firm commitment by the ECB, which will probably maintain its gradual and dependent approach to the data.
European BCE lagard
Reuters
The ECB also faces a scenario of growing political uncertainty. The possible tariff measures promoted by an eventual return of Donald Trump to the US presidency. They could significantly affect the European economy. This lack of clarity reinforces the strategy of the ECB not anticipating decisions and acting meeting at a meeting.
Axa Investment Managers economists agree that the political and economic environment demands caution. Data dependence will be key to defining the next steps of monetary policy. In that line, from Pimco they point out that the June reduction probably sets the beginning of the final phase of the cuts cycle. According to Konstantin Ven, fund manager of the firm, the ECB will maintain a reactive approach rather than proactive, evaluating whether it will be necessary to adopt a clearly expansive policy to prevent inflation from being below the medium -term target.
Source: Ambito
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