In what was widely expected to be a pause before further cuts later in the year, the Frankfurt-based central bank shunned calls to reduce the cost of borrowing and held its main interest rate at 2% and the deposit rate at 2.15%.
Is there a RISK of UNDERSHOOTING? Well Powell is not ready but ECB has already done it. What's happened that Euro is already sitting at three years highs against US dollar and projected to go higher.
The main reason why I see it as a response to tarrif threats because EU is playing a wait and watch game to see how far the US tarrifs can damage their economy. If tarrifs prove to be a false risk, I'm sure, there will be more cuts coming from ECB.