"Central Bank Minutes: Cautious Approach to Interest Rate Cuts"

ECB Meeting Minutes Show a Cautious Approach to Interest Rate Cuts

The minutes from the European Central Bank's (ECB) monetary policy meeting indicate that members of the Governing Council have expressed that there should be no rush toward further interest rate cuts.

The minutes of the meeting held in Frankfurt on September 10-11, 2025 were published. These minutes point out that maintaining the current interest rates buys time to assess the impact of US tariffs and other uncertainties.

The minutes included the statement: "This uncertainty may justify keeping interest rates steady. A significant change in the current situation is likely; however, it is hard to predict when and in which direction it will occur."

Emerging Risks Need to be Monitored

The minutes also emphasized that while recent trade agreements have reduced uncertainty in global trade, higher tariffs, a strong euro, and increasing import competition will exert pressure on growth throughout the year.

During the monetary policy meeting, it was assessed that "the Governing Council should continue to monitor the risks associated with the inflation outlook and economic activity."

ECB has paused rate cuts after lowering the deposit interest rate 8 times since June 2024. The current deposit interest rate stands at 2 percent.

Investors' eyes will be on the Monetary Policy Committee meeting scheduled for October 30. The ECB is expected to keep rates steady at this meeting as inflation is approaching its target.

In the Eurozone, annual inflation was recorded at 2 percent in August 2023, and 2.2 percent in September. The ECB aims for a 2 percent inflation target to ensure stable functioning of the economy.