BOJ Raises Interest Rates to 31-Year High, Signals Strong Focus on Inflation Risks 
South Korea Signals Possible Interest Rate Hike as Inflation Remains Elevated 
Asian Stocks Surge as Oil Prices Fall and Strong US Dollar Weighs on Markets 
German Industry Employment Falls to Lowest Level in a Decade 
Japan Inflation Stays Below BOJ Target Despite Rate Hike and Rising Energy Cost Risks 
Oil Prices Slide as U.S.-Iran Deal and Hormuz Reopening Ease Supply Concerns 
Oil Prices Drop as U.S.-Iran Peace Deal Eases Supply Concerns 
Dollar Surges After Fed Holds Rates Steady, Signals Potential Tightening Ahead 
Dollar Hits One-Month High as Hawkish Fed Outlook Boosts Greenback 
Asian Stocks Advance as Nikkei Nears Record High Ahead of Fed Decision 
Asian Stocks Rally as Japan and South Korea Reach Record Highs on US-Iran Peace Deal 
Oil Prices Ease as Markets Weigh U.S.-Iran Peace Deal and Strait of Hormuz Reopening 
Goldman Sachs Sees Fed Holding Interest Rates Steady Until 2027 
Gold Prices Slide as Hawkish Fed and Strong Dollar Weigh on Bullion 
US Stock Futures Slip After Wall Street Rally Fueled by US-Iran Deal and Chipmaker Surge 
The European Central Bank (ECB) is expected to lower interest rates three more times in 2025, bringing the key deposit rate to 1.5%, according to analysts at Deutsche Bank. The forecast includes 25 basis point cuts in June, September, and December as part of an ongoing easing cycle. However, Deutsche Bank cautions that “two-sided risks” could shift this path.
One scenario involves delayed U.S. tariffs triggering a eurozone "growth shock," which may push rates below the 1.5% threshold. Alternatively, stronger-than-expected economic resilience could halt the rate cuts earlier than projected.
In April, President Donald Trump’s announcement of sweeping U.S. tariffs, including 10% levies on European steel, aluminum, and autos, rattled global markets. Although some tariffs have been postponed, continued trade tensions remain a significant threat to eurozone growth. ECB policymakers note that heightened uncertainty and volatile financial markets may tighten financing conditions, further pressuring the economic outlook.
In response to weak economic momentum, the ECB recently cut its deposit rate by 25 basis points to 2.25%—its seventh cut in a year. The main refinancing rate dropped to 2.40%, and the marginal lending facility fell to 2.65%.
Policymakers cite falling inflation as another reason for the dovish stance. Headline and core inflation both declined in March, and services sector price gains have cooled, suggesting inflation may settle near the ECB’s 2% medium-term target.
Despite signs of resilience, the eurozone economy remains vulnerable to global shocks. ECB officials warn that if U.S. tariffs are fully implemented, euro area GDP growth could be reduced by up to 0.5 percentage points this year.
