The European Central Bank maintained its interest rates steady after eight consecutive rate reductions during the past year because EU-U.S. trade negotiations show promise of reaching a settlement. President Christine Lagarde stated that the ECB monitors trade negotiations because resolving uncertainty will positively affect the entire economy while inflation has returned to the 2% target. The White House denied reports about a potential 15% U.S. tariff on EU imports which some sources claimed to be true. The markets interpreted Lagarde’s positive outlook as a sign that additional rate cuts were unlikely which resulted in higher German bond yields. The ECB faces divided expectations from analysts who predict either additional easing measures or a possible interest rate increase.
