<h1>ECB Holds Interest Rate at 2% Amid US Tariff Threats, Evaluates Economic Impact Before Future Cuts</h1> The European Central Bank will maintain its current interest rate, postponing further cuts until it assesses the economic impact of potential US tariffs on EU goods. Having already reduced rates eight times since mid-2024 to support growth and counter inflation, the ECB faces uncertainty due to ongoing trade negotiations between the EU and the US, with tariff rates threatened to range from 10 to 30 percent. The ECB's benchmark rate currently stands at 2 percent, down from 4 percent. Analysts expect a possible rate cut in September but emphasize the need to evaluate trade outcomes first. Despite tariff threats, eurozone economic activity remains stable, inflation aligns with targets, and the euro's recent appreciation is attributed to a weaker US dollar rather than European economic strength. The ECB's decision to hold rates steady reflects caution amid trade uncertainties and aims to balance growth support with inflation control.