E.C.B. Pauses Rate-Cutting Campaign, as Trade Disputes Cloud Outlook

The European Central Bank held interest rates steady on Thursday, bringing a halt to a yearlong rate-cutting campaign, as it waited for more clarity on how President Trump’s tariffs would impact the region’s economy.

E.C.B. policymakers, who set rates for the 20 countries that use the euro, left their key rate at 2 percent. While the bank said it was in a “good place” to withstand the current economic uncertainty, some economists were expecting that another rate cut will be needed this year to support the economy if higher tariffs drag down exports.

“The economy has so far proven resilient overall in a challenging global environment,” Christine Lagarde, the president of the bank, said during a news conference in Frankfurt. “At the same time, the environment remains exceptionally uncertain, especially because of trade disputes.”

The central bank is now in a “wait-and-watch” mode, she added.

The central bank has cut interest rates eight times since June 2024 as inflation slowed along with the economy, which has been rocked by Mr. Trump’s unpredictable trade strategy. It’s in sharp contrast with the United States, where the Federal Reserve has held rates steady this year, concerned that tariffs will push prices higher. Mr. Trump has repeated pointed to the rate cuts by the E.C.B. when venting his frustration at the Fed for not cutting rates.

The E.C.B.’s decision comes as the European Union and the United States are in tense talks over trade after Mr. Trump threatened to impose a 30 percent tariff on European goods if an agreement is not reached by the end of the month. The possibility of tariffs, which were threatened to go as high as 50 percent at one point, has dampened European exports and business investment.