The European Central Bank has lowered interest rates to 2.25 percent in response to heightened economic uncertainty driven by President Trump's trade policies. This marks the seventh consecutive rate cut since June, as inflation slows and the economic outlook darkens, particularly in Germany, which faces challenges from tariffs and a weakening global economy. While there was earlier optimism due to potential fiscal spending increases in Europe, fears of a recession are rising as trade tensions suppress business investment and consumer spending.
The European Central Bank cut interest rates on Thursday as policymakers grappled with heightened economic uncertainty, particularly from President Trump's chaotic trade policies.
Policymakers lowered their key rate a quarter point to 2.25 percent, the seventh consecutive cut since June, as inflation has continued to slow.
The euro area economy has been building some resilience against global shocks, but the outlook for growth has deteriorated due to rising trade tensions.
A month ago, traders were evenly split on whether eurozone policymakers would hold or cut rates, reflecting the quickly shifting view of Europe's economy.
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