ECB Slashes Interest Rates Amid Trade Tension Woes

The European Central Bank cut interest rates for the seventh time in a year, citing risks from U.S. tariffs which could impede economic growth. President Lagarde acknowledged downside risks and kept policy measures open for further adjustments, with markets expecting more rate cuts soon.

The European Central Bank has reduced interest rates for the seventh time in just a year, with its president Christine Lagarde emphasizing the growing risks posed by U.S. tariffs. She warned that these could significantly hamper the euro area's economic growth by affecting exports and consumer confidence.

While Lagarde remained tight-lipped about future policy moves, insiders hinted at potential rate cuts in June should trade tensions persist. The market responded by predicting additional rate reductions as the ECB tackles new economic challenges.

The ECB has adjusted its stance amid volatile financial conditions, as economists cut inflation forecasts and brace for potential impacts of a full-blown trade conflict, which could further strain the eurozone economy.

(With inputs from agencies.)