European Central Bank Expected to Maintain Interest Rates Amid Economic Risks

The European Central Bank (ECB) is widely expected to keep interest rates unchanged for a second consecutive meeting, maintaining the main refinancing rate at 2.15% and the deposit facility rate at 2%. This pause reflects a cautious "wait-and-see" approach amid stable inflation, a resilient eurozone economy, and ongoing trade policy uncertainties, especially considering President Donald Trump's tariffs. Economic indicators such as inflation at 2.1%, low unemployment, and better-than-expected GDP growth have eased concerns among policymakers, suggesting the easing cycle is mostly over. The ECB's upcoming macroeconomic projections will be closely watched for potential short-term upgrades to growth and inflation forecasts, balanced by possible downgrades due to tariffs and political risks, including instability in France and Spain. Markets generally expect rates to remain steady through the end of the year, with limited chances of further cuts, while acknowledging that any significant shifts in inflation, trade, or political developments could prompt adjustments. Overall, the ECB signals a period of monetary stability aimed at supporting growth while monitoring external and internal risks.