The European Central Bank (ECB) took another bold step on Thursday, cutting its key interest rate by 25 basis points to 2.25%. This move, widely anticipated by the market, comes as the eurozone grapples with a deteriorating economic outlook fueled by rising trade tensions and global uncertainty. This is the third such reduction this year, as policymakers aim to shield the fragile economic recovery from external shocks. “The outlook for growth has deteriorated owing to rising trade tensions,” the ECB said in its policy statement, highlighting the adverse effects on household and business confidence. The decision, unanimously backed by the ECB Governing Council, reflects mounting concerns over the impact of tariffs and geopolitical discord on euro area economies. ECB President Christine Lagarde emphasized during a press conference that the region is experiencing a “negative demand shock,” with international trade disruptions and financial market tensions weighing heavily. Lagarde signaled that while global growth shows some resilience, fiscal policies and trade uncertainties could deepen the economic strain in the months ahead. Markets had already baked in a 94% likelihood of a 25-basis-point cut, according to data from financial analysts. Economists applauded the ECB’s proactive stance, though some noted that maintaining confidence in the eurozone might require additional measures. “Given the high level of uncertainty, today’s move is an insurance cut,” said Carsten Brzeski, ING’s global head of macroeconomics. He added it signals the ECB’s readiness to bolster growth amidst global economic headwinds. Looking ahead, Lagarde left the door open for more rate reductions, stating that the central bank would adopt a data-dependent, meeting-by-meeting approach to determining its monetary policy trajectory. Economists expect further cuts at the ECB’s upcoming June and July meetings if trade shocks and market volatility persist. Mark Wall, Chief European Economist at Deutsche Bank, forecasted that rates may decline to 1.5% by year-end, given the current policy direction and ongoing economic challenges. Despite the expected benefits of monetary easing, the ECB faces criticism from those arguing that interest rate cuts alone may not suffice to address core structural issues. Lagarde herself has acknowledged the limits of monetary policy, noting that fiscal and investment policies could play an equally pivotal role in stabilizing growth and fostering economic resilience. Until then, the ECB’s repeated rate slashes stand as a signal that policymakers are willing to take aggressive steps to stave off a downturn....