The European Central Bank (ECB) has cut interest rates for the eighth time in a year to address the impact of inflation falling below 2% and the economic effects of US tariffs.
The ECB's decision to lower the deposit rate to 2% was in line with analysts' predictions and comes amidst concerns about trade policies affecting business investments and exports in the short term.
New quarterly projections from the ECB show inflation below target at 1.6% in 2026, and expectations of slightly slower economic expansion next year.
The ECB's move has led to gains in European government bonds, lowered German 10-year yields, and increased market expectations of further rate cuts this year.