ECB expected to pause after eight straight cuts, while Fed faces Trump’s criticism

After eight consecutive rate cuts totaling 200 basis points, the European Central Bank is set to hold its deposit rate steady at 2% in its upcoming meeting, following the latest cut on June 5. The pause will allow policymakers to carefully assess a fragile economic and geopolitical environment, with risks of higher-than-expected U.S. tariffs complicating forecasts for growth and inflation.

Market attention will focus on ECB President Christine Lagarde’s post-meeting remarks, expected to emphasize a cautious and flexible monetary stance without giving firm guidance on future moves. Analysts suggest that any potential adjustment may not come before September.

Meanwhile in the U.S., political pressure on the Federal Reserve is intensifying ahead of its July 30 policy meeting. Treasury Secretary Scott Bessent initially questioned whether Chair Jerome Powell should step down but later softened his stance, calling Powell “a good public servant.” President Trump, however, continues his public attacks, fueling uncertainty over the Fed’s next steps.