ECB Cuts Interest Rates to 2.25% Amid Growth Fears and U.S. Tariffs
The European Central Bank (ECB) has lowered its benchmark interest rate by 0.25 percentage points, bringing it down to 2.25%.
This marks the ECB’s third rate cut in 2025, as the eurozone grapples with slowing economic growth and rising global trade tensions.
Announced on Thursday, April 17, the decision comes in response to weakening demand and the recent U.S. tariffs imposed on all European Union imports. The Frankfurt-based institution’s move was widely anticipated by economists.
U.S. Tariffs Take a Toll on EU Outlook
ECB President Christine Lagarde pointed to new U.S. trade policies as a key factor hurting the region’s economic outlook. Earlier this month, the U.S. raised tariffs on EU imports from an average of 3% to 13%, prompting concerns across European markets.
“These tariffs are already damaging confidence and slowing growth,” Lagarde said during a press conference. She warned that escalating trade tensions could reduce investment, limit consumption, and hurt exports across the bloc.
Uncertainty Clouds Rate Path Ahead
Lagarde has now overseen seven rate cuts since last year’s peak of 4%. However, she cautioned that determining a “neutral rate” — the interest level that supports the economy without overheating it — remains difficult amid global instability.
“We are not living in a shock-free world,” Lagarde said. “Anyone who thinks we are, I suggest they have their head examined.”
In its official statement, the ECB Governing Council noted that the economic outlook has deteriorated due to increased uncertainty and trade disruptions. “Confidence among households and firms may fall, and volatile market reactions could deepen the slowdown,” the council warned.
Alexander Stefanov
Reporter at Coindoo
Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over 8 years of experience covering the crypto, blockchain and fintech industries, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics.
