The ECB interrupts the series of eight consecutive cuts to the cost of money. The deposit rate remains at 2%, a level considered "neutral", while inflation has finally returned to the 2% target after peaks above 10% recorded in 2022. Lagarde chooses caution: "We are well positioned to react, but now caution is needed."

US-Europe tariffs: everything depends on Trump

The trade negotiation with Washington keeps the ECB's Governing Council on tenterhooks. Rumors of a 15% tariff agreement are dismissed by Lagarde as "speculation". Meanwhile, Trump is stirring up the markets, while the Fed remains still for fear of new inflationary pressures.

Strong euro does not convince Lagarde

Despite the 13% depreciation of the dollar since the beginning of the year, Lagarde avoids direct references to the impact on European trade. "The exchange rate is not our target, but we monitor it," she said, responding to the concerns of European policymakers worried about export competitiveness.

Further cuts further away, caution grows

Markets drastically reduce expectations for new cuts. The probability of another cut in September drops to 20% and only 36.8% expect a cut in December. Meanwhile, stock markets slow down: Milan closes at -0.24%, and the euro strengthens to 1.7780 against the dollar.

Moderate growth, inflation under control

The ECB sees "downside risks", and Lagarde remains confident about European growth, also supported by German fiscal stimulus. After the +0.6% in the first quarter, a moderate but stable expansion is expected in the 2025-2027 triennium. "The future will tell us whether another cut or a hike will be necessary," concluded the president.