ECB Cuts Rate To 2.75%, Won't Enter Bitcoin Reserves

The European Central Bank cut interest rates as expected on Thursday and left the option for more easing open. It maintained that inflation in the euro zone is mostly under control, despite concerns about global trade.

The European Central Bank (ECB) cut interest rates again on Thursday, leaving the door open for further easing as it flagged concerns about global trade despite weitgehend keeping inflation in the euro zone under control.

The ECB made its fifth rate cut since June, taking the deposit rate to 2.75% from 3.0%. The euro zone economy has shown some signs of recovery in recent surveys, but it remains weak and inflation is still slightly above the ECB’s 2% target.

The rate cut was needed to support growth and keep inflation on track, the ECB said.

“The disinflation process is well under way,” the ECB noted in its statement.

ECB officials have said that inflation is still high because wages and prices are adjusting slowly after the past surge in inflation. But wage growth is now slowing down as expected and company profits are helping to reduce the impact of inflation, the ECB said.

ECB policymakers were likely relieved that U.S. President Donald Trump’s new administration has not yet imposed the blanket trade tariffs that were feared.

But his threats still loom over the economic outlook. Tariffs tend to weaken economic growth and if countries respond with tariffs of their own, that could drive up inflation.

That could complicate the ECB’s plans to ease interest rates.

In the United States, the Federal Open Market Committee (FOMC) announced its first monetary policy decision of 2025, keeping interest rates steady at 4.25%-4.5% range, in line with expectations.

Bitcoin won’t enter EU reserves – Lagarde

European Central Bank President Christine Lagarde said she was confident that bitcoin will not enter reserves in the European Union, when asked about her confidence in the inflation target and a strategic bitcoin reserve.

She said bitcoin is suspected of being used in money laundering and other crime.

“I am confident that bitcoins will not enter the reserves of any of the central banks of the members of the general council,” she said.

Czech Republic raises concerns over bitcoin reserve proposal

The Czech Republic, meanwhile, is preparing to adopt a bitcoin reserve, but Finance Minister Zbynek Stanjura has raised concerns about the country’s bitcoin strategy.

The Finance Minister voiced concerns about bitcoin’s instability and volatility in response to the Czech National Bank (CNB) Governor’s bitcoin proposal.

He stated that bitcoin is not suitable as a national reserve due to its highly volatile nature and that the government cannot override the CNB’s decisions.