FX.co ★ ECB Nears End of Inflation Fight: Minutes

The European Central Bank (ECB) is nearing the conclusion of its effort to combat inflation, even though immediate price increases might persist due to enduring trade tensions, as highlighted in the minutes from its meeting on April 16-17. Although recent trade disputes and U.S. tariffs are predicted to hinder economic growth, ECB officials maintain optimism about achieving price stability, as disinflationary trends are anticipated to prevail in the short term. Nonetheless, some policymakers expressed concerns that an extended trade conflict could lead to long-term inflationary impacts by disrupting global supply chains. During the April meeting, the ECB executed its seventh interest rate cut within the year and is expected to lower rates again on June 5, with markets assigning a 90% likelihood to this outcome. Investors are also predicting one more rate reduction later in the year, following which the ECB’s deposit rate is expected to stabilize around 1.75%, nearing the lower end of its neutral rate spectrum.