The European Central Bank cut its main interest rate by a quarter point on Thursday, citing rising trade tensions following U.S. President Donald Trump’s sweeping tariff campaign. The decision brings the rate down to 2.25 percent, marking the ECB’s seventh cut in the past year.
In a statement, the bank said eurozone economies had built some resilience against global shocks, but the outlook for growth had worsened. Trade friction, it said, was now a defining risk.
ECB President Christine Lagarde told reporters the effects were already visible. Business investment was slowing, she said, and consumers were growing cautious. “Disruptions to international commerce, financial market tensions and geopolitical uncertainty are weighing on business investment,” Lagarde said. “As consumers become more cautious about the future, they may pull back on spending.”
Trump’s tariff policy, announced on April 2, has sparked a broader trade war with retaliatory threats from Europe and Asia. Economists warn the fallout may ripple through global supply chains.
Yael Selfin, chief economist at KPMG, said trade disruptions could lead to a glut of manufactured goods and potential deflation. “The outfall of the trade disruptions could create a global glut of manufactured goods,” she said. “That could push prices into deflationary territory this year.”
While the ECB has moved to protect the eurozone economy, the U.S. Federal Reserve has taken a different approach. At its most recent policy meeting in March, the Fed held interest rates steady. Chair Jerome Powell signalled that uncertainty from Trump’s tariffs may keep rates unchanged for the foreseeable future.
Speaking in Chicago on Wednesday, Powell offered his strongest remarks yet. “These are very fundamental policy changes,” he said, warning that the tariffs could drag on growth.
Trump reacted swiftly. On social media, he criticised Powell’s decision to hold rates and called the Fed’s latest report a “complete mess.” He added, “Powell’s termination cannot come fast enough.”
Lagarde responded with calm defiance. “I have a lot of respect for my esteemed colleague and friend Jay Powell,” she said at her press conference. She also underscored the ECB’s independence, warning against political interference in monetary policy.
“For us, here, the independence of central banks is fundamental,” Lagarde said. “Any country that wants to join the eurozone must prove it can uphold that independence in law and in practice.”
The European Commission is likely to give Bulgaria the green light on June 4 to adopt the euro currency from the start of 2026, several euro zone officials said, making Bulgaria the 21st country to join the single currency area.
Russia has accused Ukraine, with backing from some European countries, of taking actions that threaten ongoing peace talks between the two nations. These direct talks, held on May 16 for the first time in over three years, ended without a ceasefire agreement.
Over the past 20–30 years, the global landscape of scientific research and innovation has shifted dramatically.
German Defence Minister Boris Pistorius has said Donald Trump did not intentionally betray Europe, but rather overestimated his power and misjudged his role during talks with Vladimir Putin.
Once seen as an unshakeable pillar of liberal democracy, free speech in Europe is facing increasing scrutiny and constraints.
Think tanks from across the Turkic world gathered in the Turkish Republic of Northern Cyprus (TRNC) for the second edition of a major forum focused on regional cooperation, culture, and strategy.
Moroccan firefighters are battling wildfires for a fourth straight day in the Houara Forest near Tangier, as high temperatures and strong winds complicate efforts to contain the flames.
French President Emmanuel Macron arrived in Singapore Thursday for the final stop of his Southeast Asia tour.
U.S. Treasury official Scott Bessent said several large trade deals are nearing completion and that a potential call between President Donald Trump and Chinese President Xi Jinping may be needed to resolve complex issues in ongoing talks.
White House economic adviser Kevin Hassett said Thursday he expects several trade agreements could be finalized within the next week or two.
AnewZ takes to the streets of Yerevan and Baku to ask a simple yet deeply complex question: How do you see peace between Armenia and Azerbaijan? In the first part of our special report, we hear the hopes, doubts, and scars still shaping people’s perspectives on both sides.
On May 28, the inauguration ceremony of Lachin International Airport was held.
A car drove into crowds of Liverpool fans celebrating the club’s Premier League title in the city centre on Monday evening, injuring dozens including 4 children. A 53-year-old man believed to be the driver was arrested at the scene.
EU ministers have greenlit a massive €150 billion defense investment fund—dubbed the Security Action for Europe (SAFE)—as the bloc ramps up its military readiness in response to Russia’s aggression and growing uncertainty over U.S. security guarantees.
Kyiv faced a large-scale Russian drone and missile assault overnight, with explosions and gunfire echoing throughout the city, forcing residents to shelter in subway stations.
Azerbaijan's SOCAR, Kazakhstan's KazMunayGas, Uzbekistan's Uzbekneftegaz, and Russia's Tatneft have signed a landmark agreement to cooperate on decarbonization and sustainable development initiatives.
Tengizchevroil, a leading company in Kazakhstan, has officially announced the appointment of William Lacobie as its new General Director. He will assume the role on June 10, 2025.
China’s development centered on digital resources is gaining momentum under a new three-year plan aimed at boosting information use to support economic and social growth.
The European Commission is likely to give Bulgaria the green light on June 4 to adopt the euro currency from the start of 2026, several euro zone officials said, making Bulgaria the 21st country to join the single currency area.
OPEC+ is turning up the heat on U.S. shale producers in a renewed bid to reclaim market share, but early signs of slowdown suggest it will take more sustained pressure to truly shift the global oil balance.
Think tanks from across the Turkic world gathered in the Turkish Republic of Northern Cyprus (TRNC) for the second edition of a major forum focused on regional cooperation, culture, and strategy.
Moroccan firefighters are battling wildfires for a fourth straight day in the Houara Forest near Tangier, as high temperatures and strong winds complicate efforts to contain the flames.
French President Emmanuel Macron arrived in Singapore Thursday for the final stop of his Southeast Asia tour.
U.S. Treasury official Scott Bessent said several large trade deals are nearing completion and that a potential call between President Donald Trump and Chinese President Xi Jinping may be needed to resolve complex issues in ongoing talks.
White House economic adviser Kevin Hassett said Thursday he expects several trade agreements could be finalized within the next week or two.
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