The European Central Bank (ECB) has reduced its benchmark interest rate by a quarter-point to 2.25%, the lowest in over two years, in response to economic uncertainties stemming from US President Trump’s trade war. This decision reflects a deteriorating growth outlook due to rising trade tensions, although the ECB’s shift in language signals potential limits on future rate cuts. Despite Trump’s temporary tariff delay, economists warn that his protectionist policies could still negatively impact the Eurozone’s growth and inflation, which has recently edged down to 2.2%.
