Core Viewpoint - The European Central Bank (ECB) has decided to maintain its key interest rates unchanged, signaling the end of the easing cycle and potential future rate hikes as inflation stabilizes around the target level [1][3][6]. Interest Rate Decision - The ECB has kept the deposit facility rate at 2.00%, the main refinancing rate at 2.15%, and the marginal lending rate at 2.40% [1][5]. - This marks the second consecutive meeting where the ECB has opted to keep rates unchanged, aligning with market expectations [3][9]. Inflation Outlook - Current inflation levels are near the ECB's medium-term target of 2%, with forecasts indicating an overall inflation rate of 2.1% in 2025, 1.7% in 2026, and 1.9% in 2027 [6]. - The core inflation rate, excluding energy and food prices, is projected to be 2.4% in 2025, 1.9% in 2026, and 1.8% in 2027 [6]. Economic Growth Projections - The ECB has revised its GDP growth forecast for 2025 to 1.2%, up from 0.9% previously, while maintaining a 1.0% growth forecast for 2026 and 1.3% for 2027 [6]. - Economic resilience is attributed to strong demand, with improvements in recent economic data and reduced trade uncertainties [6][10]. Market Reactions and Future Expectations - The EUR/USD exchange rate has been rising, currently reported at 1.17364, reflecting market confidence in the ECB's decisions [11]. - Analysts suggest that the ECB's easing cycle may be over, with future actions likely leaning towards rate hikes rather than cuts, contingent on economic conditions [10].