The ECB cut all three of its key interest rates by 25 basis points, lowering the main refinancing rate to 2.40%, the deposit rate to 2.25%, and the marginal lending facility to 2.65%, in line with market expectations.
ECB delivers seventh straight cut in April
The move signals growing confidence that inflation is gradually aligning with the ECB’s medium-term 2% target. Headline and core inflation have continued to ease, supported by a notable cooling in services inflation. Wage growth, while still elevated, has begun to moderate, and corporate margins are partially absorbing cost pressures, helping contain second-round inflation effects.
Despite these positive signals, the ECB warned that the economic outlook remains fragile. Rising global trade tensions, particularly between the US and China, are clouding the external environment, dampening business and consumer confidence, and tightening financial conditions across the bloc. The euro area's growth momentum has softened, and the central bank acknowledged that uncertainty may weigh further on economic activity in the near term.
Monetary policy will remain data-dependent
The ECB emphasized that monetary policy will remain data-dependent and will be assessed on a meeting-by-meeting basis. Policymakers refrained from signaling a specific path for rates, underscoring that future moves will hinge on incoming data, inflation dynamics, and how effectively monetary policy is being transmitted through the economy. The central bank reiterated its readiness to use all tools within its mandate to maintain price stability and ensure smooth transmission across member states.
Asset purchase programs under the APP and PEPP remain in passive runoff mode, as the Eurosystem continues to allow securities to mature without reinvestment.
