ECB Plans 0.25% Rate Cut Amid Eurozone Inflation Dip

The European Central Bank (ECB) is widely expected to cut interest rates by 25 basis points in its upcoming meeting, marking the eighth consecutive reduction since June last year, as inflation in the eurozone has eased below the bank's 2% target. This move aims to stimulate growth amid slowing inflation and ongoing global trade uncertainties, particularly due to US trade policies under President Trump. While the ECB under Christine Lagarde's leadership seeks to support the economy, there is cautious optimism as some policymakers advocate for a possible pause in rate cuts during the summer to reassess the economic outlook. Inflation data shows a decline in headline and core inflation, driven by falling energy prices and slowing services inflation, contributing to expectations for continued monetary easing. Investors are closely monitoring ECB's updated staff projections and Lagarde's press conference for guidance on future policy moves, with market volatility anticipated around the euro and US dollar exchange rate. Despite low unemployment, recent economic surveys indicate persistent challenges in the eurozone economy, reinforcing the ECB's cautious approach amid global uncertainties.