How the interest in the euro zone will continue

And according to observers, it is clear that two interest rate reductions will follow this year – and then the end of the end. A few months ago, it had looked that it could be less than 2.0 percent with the deposit rate. But the signs have changed.

“We have risks everywhere, uncertainty everywhere,” said Lagarde after the meeting. You have to wait and rate the data. According to experts, the ECB could also take a break at the next meeting in April. On request, Lagardde did not want to rule out a break or a further reduction.

Obsolet expectations

The ECB now expects a slower decline in inflation as well as less growth than forecast in December. However, these new assumptions that were published yesterday, Thursday, are as good as obsolete.

This is due to Germany and the announcement by CDU boss Friedrich Merz to pump half a trillion euros into the country’s infrastructure as the future Federal Chancellor. In addition, there is the EU’s 800 billion package for military upgrading. Germany will also be responsible here.

These two points should give the economy a booster in Europe, so that the ECB does not have to set any promotions in the second half of the year until further notice. Especially since with these pacts the inflation risks rise again. Even deeper interest would be an excessive dose for economic revival.

Be vigilant

According to Lagarde, the exact consequences of changed German politics for growth and inflation cannot yet be estimated. “This is an ongoing process.” The schedule and financing are still open. “We have to be attentive and vigilant.”

In addition, Donald Trump is involved. US customs policy could also increase inflation again in the euro area-for example through the EU’s tariffs.

Euro course attracts

After the decision became known, the euro continued to climb to the dollar and reached the highest level since November 2024 with $ 1.085. Since Monday, it has increased by more than four cents.

There were also gains compared to other currencies. The community currency benefits from the hope of more growth in Europe. In addition, the trade war, which is placed by US President Trump, continues to burden the dollar.

Holzmann Schert out

The ECB council members who decide on interest steps, by the way, made the resolutions in consensus, according to Lagarde at the interest session. “Nobody opposed it,” said Lagarde. However, the Austrian council member, OENB-GouVerneur Robert Holzmann, contained the voice. At the beginning of the current interest cycle in June of the previous year, he was the only council member against a reduction.