Eurozone Inflation Holds Steady, Supporting Case for ECB Rate Cuts

Eurozone consumer inflation remained at 2.2% year-over-year in April, slightly above the European Central Bank’s target, according to EU data released Friday. The figure matched March’s rate but exceeded forecasts of 2.1%.

A drop in energy prices helped contain headline inflation, though core inflation—excluding volatile items—rose to 2.7%, partly due to Easter timing effects. Policymakers remain cautious as services prices gain momentum.

Despite inflation staying above target, expectations for ECB rate cuts are growing as global growth weakens and new U.S. tariffs add to uncertainty. A stronger euro and rising Chinese imports could further ease inflation pressures. Revised ECB forecasts due next month may reflect these shifting dynamics.