ECB Expected to Cut Interest Rates Four Times

The European Central Bank (ECB) is expected to continue its series of interest rate cuts until at least July 2025 in response to a fragile euro zone economy facing challenges from U.S. tariffs. Economists predict a 25 basis point drop in the deposit rate on January 30, with further cuts anticipated throughout the year. ECB Chief Economist Philip Lane emphasized the need for a balanced approach to avoid recession while managing inflation, which currently stands at 2.4%. Political turmoil in key economies like Germany and France may hinder investment and consumption, complicating the ECB's response. While there is optimism about controlling inflation, Lane and other officials highlight the importance of caution amid significant uncertainty in global trade and domestic politics. The ECB has already enacted four rate cuts in the past year and may implement additional reductions based on economic conditions.