Many analysts anticipate that the European Central Bank (ECB) will cut interest rates by 0.25 basis points to 2.25%, with the Governing Council’s decision set to be announced at 2:15 PM (1215 GMT). The main interest rate affects borrowing costs for banks and savers across the 20-country eurozone.

The expected rate cut comes amid a slowdown in economic momentum and declining inflation in the eurozone. Although new trade tensions with the United States are adding uncertainty, the ECB is still likely to ease monetary policy during today’s Governing Council meeting.

Inflation data supports the case for a rate cut. Consumer prices in the eurozone rose by just 2.2% last month, bringing inflation close to the ECB’s 2% target. According to the ECB’s latest forecasts, inflation is expected to remain around that level through 2025.

A rate cut would also help cushion the impact of the ongoing economic slowdown in the eurozone, which is under pressure from the expanding U.S. tariff measures. Although a 90-day suspension has been placed on a planned 20% blanket tariff on EU imports, European products still face newly imposed U.S. tariffs of 10%, in addition to 25% duties on cars, steel, and aluminum.

If the ECB goes ahead with the cut, it would mark the seventh interest rate reduction since June 2024.

However, some analysts believe the ECB might postpone the decision, citing growing uncertainty surrounding U.S. trade policy. ECB President Christine Lagarde recently warned of significant losses to eurozone growth if the trade conflict with the U.S. escalates further.