ECB Cuts Rates to 2%; Germany Faces Third Year of Stagnation
Key Takeaways
- ECB cuts interest rates to 2%, diverging further from the Federal Reserve's policy.
- Germany's economy faces a third year of stagnation due to global trade uncertainty.
- Russia cuts its key interest rate by 1% to 20%, the first cut in 3 years.
- Calvin Klein and Jack Daniel's cut profit outlooks, citing the impact of tariffs.
- Equity market anxiety may return with a weak jobs report showing under 100,000 jobs.
Top Stories
ECB cuts interest rates to 2%, diverging from Fed.
On June 5, 2025, the ECB cut interest rates to 2% in an effort to bolster flagging eurozone growth. This was the eighth time the ECB cut rates, further diverging from the Federal Reserve's policy.
Germany's economy faces third year of stagnation.
On June 6, 2025, the Bundesbank reported that Germany’s economy is facing a third year without growth due to global trade uncertainty. The central bank downgraded its December prediction and now predicts GDP will stagnate this year, but expects a “significant” recovery from next year, driven by infrastructure and defense spending.
Russia cuts rate by 1% to 20%.
On 2025-06-06, the Bank of Russia reduced the benchmark rate by a full percentage point to 20%, marking the first interest rate cut in nearly three years due to easing inflation and signs of economic struggle.
Calvin Klein, Jack Daniel's, profit outlook cut citing tariffs.
On 2025-06-05, Calvin Klein's owner cut its profit outlook, citing tariffs. On 2025-06-05, Brown-Forman's gloomy forecasts sent shares of Jack Daniel's maker tumbling.
Equity market anxiety may return with weak jobs report.
BeiChen Lin said on 2025-06-06 that if Friday’s report “shows less than 100,000 jobs ended up being created, I think that’s where the equity market anxiety might come back.”
Central Bank Actions
India's central bank cuts rates, boosts liquidity.
On 2025-06-06, India’s central bank cut interest rates more than projected and unexpectedly reduced the cash reserve ratio for banks, providing a major liquidity boost to the economy.
Economic Indicators
Consumers hesitant, services/manufacturing sectors slowing.
Consumers, who fuel the American economy, have become more hesitant to spend, and according to recent surveys, both the services and manufacturing sectors are slowing. This information was published on 2025-06-06.
Italy forecasts GDP growth of 0.6% in 2025.
Italy’s statistics institute (ISTAT) in Rome published a report on 2025-06-06, forecasting a 0.6% rise in gross domestic product in 2025 and 0.8% in 2026.
Job opening rate plateaued near 2019 levels.
The labor market data has been mixed in recent weeks. The job opening rate appears to have plateaued at around 2019 levels, after surging and then falling rapidly last year. This was reported on 2025-06-06.
Global Trade
Businesses expect to pass half of tariff costs to consumers.
A survey from the Federal Reserve Bank of Atlanta published on 2025-06-05, indicates that businesses expect to pass roughly half of tariff-related expenses to US consumers.
EU monitors trade diversion from US tariffs.
On 2025-06-05, the European Commission formally launched a surveillance tool to monitor trade diversion resulting from US President Donald Trump’s tariffs. Initial results revealed a surge of imports in many goods, with a first set of analysis showing imports of some appliances and switches increased by more than 60% compared with last year, while prices dropped.
Xi invited Trump to China amid tariff tensions.
On June 5, 2025, it was reported that Xi invited Trump to China amid tariff tensions. Crude futures rose after a report of a call between Trump and Xi.
Central banks' forecasts fogged by US tariffs.
On 2025-06-05, it was reported that big central banks' forecasting lens gets fogged by US tariffs. European Central Bank Governing Council member Jose Luis Escriva stated that policymakers are carefully watching the impact of US tariffs on the euro-area economy.
Analyst recommends 'neglected' cheap stock amid tariffs.
On 2025-06-05, an analyst suggested that Trump's tariffs are likely to remain and recommended a 'neglected' cheap stock.
Financial Concerns
Citadel CEO worried by rising US default insurance.
Market Overview
Stock market rose due to China talks.
On June 5, 2025, a report indicated that the stock market rose due to China talks.
NYSE: US IPO revival primed despite tariff uncertainty.
On 2025-06-05, NYSE President Martin stated that public markets are primed for a US IPO revival despite tariff uncertainty.
Goldman Sachs pared risk after tariff move.
On 2025-06-05, Goldman Sachs pared risk after tariff move, bracing for more uncertainty.
CRCL trending at 83.23 (+168.48%).
Emerging assets surged due to bleak US data.
Circle soars in NYSE debut.
Stablecoin bigwig Circle soars in debut on the New York Stock Exchange, published on 2025-06-05.
Market Watch
Gold prices increased amid ongoing trade war.
Policy Watch
Wall Street's winners/losers from Trump's tax bill.
Published on 2025-06-05, the article discusses Wall Street's potential winners and losers from Trump's tax bill.