Today, the European Central Bank (ECB) decided to cut the interest rate for the deposit facility by 25 basis points to 2.00%. The main refinancing rate will be adjusted to 2.15% and the marginal lending rate to 2.40%. This will go into effect from 11 June 2025.
Florian Heider, Scientific Director of the Leibniz Institute for Financial Research SAFE, comments:
"As expected by the markets, the European Central Bank has cut interest rates again today. Gradually, a pause in rate cuts would be appropriate. At 1.9%, inflation has even fallen slightly below its target value.
Further monetary easing no longer seems necessary at this stage. The process of stabilizing inflation appears to be complete. With the eighth consecutive rate cut, real interest rates are now close to zero, and further economic stimulus through lower rates is currently unwarranted. Many economic problems are structural in nature. However, the European economy continues to face significant headwinds from geopolitical tensions and the ongoing trade conflict. The ECB should preserve monetary policy flexibility to be able to respond swiftly in the event of new geopolitical or economic shocks."
Scientific Contact
Prof. Dr. Florian Heider
Scientific Director, Co-Director Department "Financial Intermediation"
