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ECB And Fed To Cut Rates At Different Speeds In 2025 Amid Trade Uncertainty

The European Central Bank (ECB) and the Federal Reserve (Fed) are taking different approaches to interest rate cuts in 2025 as their economies follow distinct paths. While the Eurozone faces sluggish growth, prompting the ECB to ease monetary policy, the Fed remains cautious due to a resilient U.S. economy and ongoing trade policy uncertainties.

Fed Holds Rates Amid Policy Uncertainty

The Fed maintained its policy rate at 4.25%-4.50%, marking its first pause since it began cutting rates last year. The decision reflects the central bank’s careful approach amid complex economic conditions.

A key change in the Fed’s statement was its upgraded assessment of the labor market, now seen as “stabilized.” Inflation was described as “somewhat elevated,” though Chair Jerome Powell downplayed this revision. Powell emphasized that the Fed is not in a rush to cut rates but remains open to adjustments based on labor and inflation data. However, he avoided addressing questions on tariffs, which remain a major inflationary wildcard.

Markets reacted with mixed signals, balancing the Fed’s official stance with Powell’s more dovish tone. The Fed’s next steps depend on how trade policies evolve under the new administration, particularly as tariffs and tighter immigration policies could keep inflation elevated.

ECB Cuts Rates To Support Growth

In contrast, the ECB reduced its key policy rate by 25 basis points to 2.75%, reaffirming its data-driven approach while signaling further rate cuts. The bank aims to reach its estimated neutral rate of 2%, though weak economic indicators suggest it may need to ease further.

Recent data supports this stance:

  • Q4 GDP growth stagnated at 0.0%, missing the ECB’s 0.2% projection.
  • Headline and core inflation ended Q4 lower than expected, though ECB President Christine Lagarde noted lingering wage and supply chain pressures.
  • The Bank Lending Survey showed tightening credit conditions, reflecting banks’ growing risk concerns.

Looking ahead, the ECB is expected to continue cutting rates aggressively until reaching 2%, then shift to a more gradual pace. Some analysts predict a further drop to 1.5% by year-end if trade tensions persist.

Both central banks’ policies hinge on global trade developments. The Fed remains cautious, awaiting clarity on President Trump’s tariff strategy, which could drive inflation and supply chain disruptions. Meanwhile, the ECB’s easing cycle may be influenced by trade frictions affecting European exports and business sentiment.

As trade policies unfold, the Fed and ECB remain on diverging paths—one in wait-and-see mode, the other pushing ahead with rate cuts.

Forbes Middle East Unveils 100 Most Powerful Businesswomen Of 2025

Forbes Middle East has unveiled its much-anticipated 2025 ranking of the region’s top businesswomen, spotlighting influential leaders reshaping industries and driving meaningful transformation. The list was based on business size, individual accomplishments, leadership impact, and corporate social responsibility initiatives.

Top Spot For Hana Al Rostamani

For the third consecutive year, Hana Al Rostamani, Group CEO of First Abu Dhabi Bank (UAE’s largest bank by assets), claims the top position. In addition to retaining her position in the Forbes Middle East ranking, she was also featured on Forbes’ 2024 list of the World’s Most Powerful Women, securing the 60th position globally. Under her leadership, the bank achieved an impressive $3.5 billion in net profits and $334.8 billion in assets in the first nine months of 2024.

Rising Stars In The Top 10

Shaikha Khaled Al Bahar of NBK Group and Shaista Asif, cofounder and Group CEO of PureHealth Holding, take the second and third spots respectively, completing the top three.

The top 10 remains largely unchanged from last year, with Tayba Al Hashemi of ADNOC Offshore, Alisha Moopen of Aster DM Healthcare GCC, and Suzanne Al Anani of Dubai Aviation Engineering Projects (DAEP) making their debut in the top 10. In total, 27 new leaders have joined the list this year.

A Diverse And Powerful Group Of Women

This year’s list features 100 women from 32 sectors and 29 nationalities, underlining the diversity of talent driving the region’s progress. The banking and financial services sector leads with 25 entries, followed by healthcare and technology with nine each, and venture capital with five. Remarkably, 40% of the top 10 women are from the banking and financial services sector. Notably, Shaista Asif (PureHealth Holding) and Alisha Moopen (Aster DM Healthcare GCC) are the only non-Arab women in the top 10.

UAE Leads With 46 Leaders

The UAE continues to dominate, with 46 of the women on the list hailing from the country, solidifying its status as a global business hub. Egypt follows with 18 influential women, and Saudi Arabia claims nine entries. Egyptians lead in representation, followed by Emiratis and Lebanese women.

Empowering Women Through Initiatives

Several of the leaders have focused on upskilling and creating opportunities for women. Susana Rodriguez Puerta launched the ‘sAIdaty’ initiative in collaboration with the Dubai Business Women Council, aimed at providing 500 female council members in the UAE with AI skills. Similarly, Lamia Tazi of SOTHEMA collaborated with the Foundation for Research, Development, and Innovation in Science and Engineering to provide scholarships to PhD students from low-income backgrounds.

Click here for the full list.

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