The monetary chief told reporters in Frankfurt on Thursday that a huge increase military spending is likely to boost the economy

European Central Bank policymakers see a growing chance of a pause in their easing cycle at their next meeting before rates come down again, once they have greater clarity about trade and fiscal policy,

The European Central Bank is set to cut interest rates again on Thursday. After cutting borrowing costs rapidly over the past nine months as inflation retreated and economic growth faltered, the euro zone's central bank has telegraphed another 25 basis point reduction in the deposit rate.

Although the ECB would not pre-commit to future rate cuts, the fact that Christine Lagarde did not push back on lower rate cut expectations is a sign that the ECB is comfortable with a neutral rate around 2%.

The market now expects less than three ECB rate cuts this year; the market had expected more than three cuts earlier this week. There has also been an increase in the ECB’s neutral rate from 1.8% at the start of this week, to 1.97% on Wednesday. The market is also starting to price in rate hikes from early 2026.

The European Central Bank (ECB) will announce its interest rate decision on Thursday, with market expectations leaning towards a 25 basis point cut, bringing th

Officials concur that rates should be brought to levels that no longer constrain activity, known as neutral. Only a few, though, have floated the idea of pushing even lower to stimulate demand. While a recent study by ECB staff put neutral at 1.75% to 2.25%, some hawks say it may be higher.