ECB Cuts Interest Rates Amid Falling Inflation, as Trump Renews Pressure on US Fed

In a widely expected move, the European Central Bank (ECB) on Thursday lowered its main interest rate to 2% from 2.25%, marking the eighth rate cut since June 2024. The decision underscores Europe's success in taming inflation and puts the ECB at odds with the US Federal Reserve, which has opted to hold rates steady despite mounting political pressure.

This latest reduction follows the Eurozone’s consumer price inflation drop to 1.9% in May, finally bringing it below the ECB’s 2% target for the first time since September. With inflation cooling across the 20 euro-using nations, the ECB is seizing the opportunity to stimulate economic growth through cheaper borrowing.

However, the timing of the decision has triggered fresh criticism from former US President Donald Trump, who has repeatedly attacked the Federal Reserve and Chair Jerome Powell for not cutting interest rates in the US. Trump took to social media on Wednesday, demanding, "'Too Late' Powell must now LOWER THE RATE. He is unbelievable!!! Europe has lowered NINE TIMES!”
(Clarification: The ECB had made seven rate cuts before Thursday’s decision.)

According to Hussain Mehdi, investment strategist at HSBC Asset Management, the ECB is in “an enviable position” with core inflation returning to pre-Russia-Ukraine war levels. He attributed the trend to a stronger euro, declining oil and gas prices, and tariffs that could curb demand and further suppress price increases.

While the Fed holds back on interest rate changes, concerned about the long-term effects of Trump's ongoing trade wars, the ECB seems more proactive in using monetary tools to support the economy.

ECB President Christine Lagarde acknowledged that global trade tensions remain a serious risk. “A further escalation in global trade tensions and associated uncertainties could lower euro area growth by dampening exports and dragging down investment and consumption,” Lagarde warned.

Efforts to ease these tensions are ongoing. EU Trade Commissioner Maroš Šefčovič and US Trade Representative Jamieson Greer reported progress in US-EU trade negotiations, which gained urgency after Trump floated the idea of slapping 50% tariffs on European imports.

Economists argue that the uncertainty around global trade may be weighing more heavily on the eurozone economy than interest rates themselves. Felix Schmidt, senior economist at Berenberg Bank, noted that resolving these trade concerns could be the key to unlocking growth:

“If this uncertainty diminishes in the wake of a deal between the US and the EU, as we expect, growth should rebound.”
 

As the ECB slashes interest rates to energize its economy and push inflation further below target, the pressure mounts on the US Federal Reserve to follow suit. With US inflation still relatively sticky and economic growth uncertain, Powell’s decision to delay any cuts continues to face scrutiny — especially in an election year.

Whether the Fed will shift its stance in response to European action or political pressure remains to be seen. But one thing is clear: the contrast between ECB and Fed policy is widening, and its ripple effects are being felt in global markets, trade diplomacy, and domestic politics alike.

 In a dramatic move reflecting growing tensions between tech privacy and child safety laws, Pornhub—one of the world’s largest adult content platforms—has officially ceased operations in France, the platform’s second-biggest market after the United States. The decision comes in direct response to a French government law mandating strict age verification measures for all pornographic websites.

Pornhub’s parent company, Aylo (formerly MindGeek), announced on Wednesday that it would block French users from accessing Pornhub, YouPorn, and Redtube due to what it called "unworkable data protection concerns."

The French law, enacted in 2023 and enforced through regulator Arcom, requires all adult websites to implement robust age-verification technologies. These include methods such as scanning a government-issued ID or verifying via bank card details, a move that Aylo contends compromises user privacy.

In a statement, Alex Kekesi, Aylo’s Vice President of Brand and Community, expressed disappointment over the situation:

“We’ve spent years attempting to collaborate with French authorities to find a solution that prevents minors from accessing adult content while also protecting the data privacy of millions of French citizens. Unfortunately, such a balance has proven elusive.”
 

Kekesi further argued that tech giants like Apple, Google, and Microsoft—not adult content platforms—should bear responsibility for verifying user ages at the device level.

France’s communications regulator Arcom was quick to counter Aylo’s claims, criticizing the company for "shirking its responsibility" to safeguard children. In its statement, Arcom pointed to existing technical solutions that verify age without compromising personal data, accusing Aylo of opting out instead of adapting.

The country’s Gender Equality Minister, Aurore Bergé, welcomed the exit. Posting on X (formerly Twitter), she said:

“Pornhub, YouPorn, and Redtube refuse to comply with our legal framework and decide to leave. Good! That means less degrading and violent content accessible to our minors.”
 

France is not alone in pushing for stricter controls on porn site access for minors. Across the globe, governments are tightening digital protections for children:

• In the United States, 19 states have passed laws requiring proof of age via ID scans or biometric verification.
   
• As a result, Pornhub has already blocked access in many of those states rather than investing millions in compliance systems.
   
• Meanwhile, the European Commission has launched an investigation into Pornhub and other top adult platforms, alleging violations of EU digital safety regulations.
   
• The Commission is also working on an anonymous age-verification app, allowing adults to confirm they are over 18 without revealing personal data.
   

Aylo’s withdrawal marks a turning point in the global debate over age verification, data privacy, and regulatory compliance in the adult industry. While critics argue that enforcement can drive users to less regulated or unsafe sites, others, like the French government, see this as a win for online child safety.

For now, French internet users no longer have access to Pornhub, YouPorn, and Redtube. Aylo has not indicated if or when access may resume, pending changes in either French law or the development of secure and privacy-friendly age-verification technology.