ECB Readies for Interest Rate Adjustments Amid Global Uncertainty

The U.S. President Donald Trump's tariff threats are causing global uncertainty. However, the European Central Bank (ECB) sees room for reducing interest rates in the euro-zone as inflation drops. ECB policymaker Francois Villeroy de Galhau hints at potential gradual rate cuts, despite limited enthusiasm for significant moves.

Amid global tensions spurred by U.S. President Donald Trump's tariff threats, the European Central Bank (ECB) considers further interest rate cuts in the euro-zone. With inflation declining, ECB policymaker Francois Villeroy de Galhau emphasizes that there's a margin for gradual rate reductions.

According to Villeroy, also the head of the Bank of France, potential reductions are on the table, but ECB policymakers display little enthusiasm for substantial cuts. The ECB already reduced its benchmark rate to 2.25% earlier this month.

Despite ongoing pressures from global economic uncertainties, ECB members show growing confidence in considering rate adjustments by June, as sources told Reuters. However, significant rate cuts remain unlikely, with the focus on gradual adjustments.

(With inputs from agencies.)