Maintaining unchanged all three major interest rates at Thursday's September 11, 2025, monetary policy meeting, the European Central Bank signalled the second successive pause in what had been an intense easing cycle. Holding the deposit facility rate at 2.00%, the ECB seems to be signaling, with the primary refinancing rate at 2.15% and the marginal lending facility at 2.40%. Trust in the path of the eurozone economy. Eight rate cuts enacted between June 2024 and June 2025 follow this judgment, implying the central bank might have hit the basement of its ongoing easing cycle.
The ECB's decision is based on rising expectations for eurozone economic resilience; manufacturing PMI is once more in expansionary territory for the first time in almost three years. strong personal consumption assisting growth momentum. The central bank seems at peace with temporary fluctuations around its inflation target, even if inflation in August was running slightly above the 2% goal at 2.1% year-on-year. Although European exporters now have 15% tariffs on most goods entering US markets after recent bilateral agreements, the eurozone has also shown more-than-expected resistance to US-EU trade disputes.
Keeping monetary policy choices open, President Christine Lagarde is expected to keep the ECB's "data-dependent and meeting-by-meeting approach" without pre-committing to any particular rate path. Less than even odds for another cut before 2026, money markets had priced in virtually no chance of a rate change, hence confirming expert predictions. that this cycle's floor could be found in the 2% deposit rate. The decision comes at a crucial point as the Federal Reserve is set to start its own rate-cutting cycle next week, maybe resulting in different policy trajectories that could help the euro value against the dollar.


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