The European Central Bank (ECB) is expected to keep its deposit rate at 2 percent, with officials choosing to wait amid growing concerns tied to the Trump tariff appeal. Experts say the eurozone economy remains resilient but exposed to risks, and trade tensions could put more pressure on inflation goals, making now a risky time for any rate moves on the ECB interest rate.
This comes just as talks around a possible U.S.–EU trade deal hang in the balance. With the deadline for U.S. tariff decisions approaching on August 1, many market watchers see only a 50-50 chance of a deal. The uncertainty around those decisions makes it harder for the ECB to shift its stance on policy, especially when the full impact of the trump tariff appeal remains unclear.
A major part of that uncertainty stems from recent court decisions. A federal court let the current U.S. tariffs stay in place while appeals continue. A key hearing is scheduled for July 31, and the outcome could shape global trade dynamics. For now, the trump tariff updates are keeping central banks—and markets—on edge.
Trump tariff updates reshape global market expectations
Big banks like Goldman Sachs and J.P. Morgan have changed their forecasts. They now think any ECB rate hike is unlikely this year and possibly even next year. They believe that the combination of a stronger-than-expected eurozone economy and potential new U.S. tariffs makes rate cuts a tough call. Some financial institutions still expect a cut in September, but those bets are getting weaker.
President Lagarde of the ECB said inflation is hovering near 2%, and there’s been a small boost in consumer confidence. But she also warned that renewed tariffs on European exports could hurt the recovery. Business investment has slowed, and exports are down, putting pressure on the economy.
Until there’s clarity on the trump tariff appeal, the ECB is likely to stay cautious. If the court upholds the tariffs or delays a final ruling, global trade tensions could drag on. That would likely keep the ECB interest rate right where it is for now. All eyes are on the July 31 hearing, which could give the first clear signal of where things are headed.
