BOJ Expected to Deliver December Rate Hike as Economists See Borrowing Costs Rising Through 2025 
Asian Stocks Rally as Tech Rebounds, China Lags on Nvidia Competition Concerns 
Asian Currencies Steady as Fed Delivers Hawkish Rate Cut; Aussie and Rupee Under Pressure 
ECB Signals Steady Rates Ahead as Policymakers Warn of Inflation Risks 
Fed Rate Cut Signals Balance Between Inflation and Jobs, Says Mary Daly 
Mexico Moves to Increase Tariffs on Asian Imports to Protect Domestic Industries 
Hong Kong Cuts Base Rate as HKMA Follows U.S. Federal Reserve Move 
Oil Prices Edge Higher as U.S. Seizes Sanctioned Venezuelan Tanker 
Asian Stocks Slip as Oracle Earnings Miss Sparks AI Profitability Concerns 
Asian Currencies Hold Steady as Indian Rupee Slides to Record Low on Fed Outlook 
Japan’s Finance Minister Signals Alignment With BOJ as Rate Hike Speculation Grows 
Wall Street Futures Dip as Broadcom Slides, Tech Weighed Down Despite Dovish Fed Signals 
The European Central Bank (ECB) is expected to lower interest rates three more times in 2025, bringing the key deposit rate to 1.5%, according to analysts at Deutsche Bank. The forecast includes 25 basis point cuts in June, September, and December as part of an ongoing easing cycle. However, Deutsche Bank cautions that “two-sided risks” could shift this path.
One scenario involves delayed U.S. tariffs triggering a eurozone "growth shock," which may push rates below the 1.5% threshold. Alternatively, stronger-than-expected economic resilience could halt the rate cuts earlier than projected.
In April, President Donald Trump’s announcement of sweeping U.S. tariffs, including 10% levies on European steel, aluminum, and autos, rattled global markets. Although some tariffs have been postponed, continued trade tensions remain a significant threat to eurozone growth. ECB policymakers note that heightened uncertainty and volatile financial markets may tighten financing conditions, further pressuring the economic outlook.
In response to weak economic momentum, the ECB recently cut its deposit rate by 25 basis points to 2.25%—its seventh cut in a year. The main refinancing rate dropped to 2.40%, and the marginal lending facility fell to 2.65%.
Policymakers cite falling inflation as another reason for the dovish stance. Headline and core inflation both declined in March, and services sector price gains have cooled, suggesting inflation may settle near the ECB’s 2% medium-term target.
Despite signs of resilience, the eurozone economy remains vulnerable to global shocks. ECB officials warn that if U.S. tariffs are fully implemented, euro area GDP growth could be reduced by up to 0.5 percentage points this year.
