The European Central Bank may remain on hold, Lagarde may reiterate downward growth risks.

The European Central Bank may choose to temporarily postpone cutting interest rates in response to the economic risks posed by Trump's tariffs. In the last decision before entering a seven-week summer break, policymakers may on Thursday keep the interest rate at 2% unchanged until the tariffs actually take effect and their impact can be more accurately assessed. However, policymakers are well aware that risks are looming: in addition to tariff concerns, a strong euro is dampening price prospects and further squeezing exporters, while public finance issues in France could brew a new political crisis. Against this backdrop, the possibility of a rate cut in September within the European Central Bank may be acknowledged internally. Morgan Stanley economists stated that based on this, ECB President Lagarde may reiterate in his statement on Thursday that growth risks are "tilted to the downside." "We expect the wording after the meeting on July 24 to be similar to that of June, leaving open the possibility of further rate cuts, but not making a commitment."