"Inflation in the euro area is falling – and falling significantly. Provided the situation in the Middle East remains stable, the peak of the energy-driven price surge is now behind us. This reduces the likelihood of a further interest rate hike by the ECB, although a continuation of monetary tightening cannot be ruled out. In July, however, key interest rates are likely to remain unchanged for the time being. Only the data from the coming weeks and months will reveal how much additional price pressure the four-month high in energy prices is still exerting on the economy. Whilst companies’ expectations for selling prices are, for the most part, falling again, producer prices for intermediate goods are rising noticeably. However, significant second-round effects on the labour market can largely be ruled out. There are no signs of strong wage growth.”

Stefanie Schoenwald

"As the situation in the Middle East stabilises, the inflation shock is also subsiding. Fuel prices are falling again. Whether consumer price inflation will continue to decline in the coming months remains to be seen. This is not only due to the impending termination of the fel tax rebate. The situation in the Persian Gulf remains fragile and gas prices have not followed the rapid decline in oil prices. Furthermore, the current trend of very favourable food prices could soon come to an end. The high fertiliser prices of recent weeks and the looming severe El Niño are likely to have a delayed impact.”

Stefanie Schoenwald

“The improvement in business sentiment is more pronounced in assessments of the current situation than in expectations: here, the index has reached its highest level since June 2024. This pointed to a moderate acceleration of economic activity toward the end of the second quarter. All in all, the war in Iran appears to have had only a minor impact. At the same time, companies remain cautious about the rest of the year. This may mean either that there is a certain degree of skepticism regarding the negotiations between the U.S. and Iran and/or that other factors continue to weigh on sentiment. It is worth noting, however, that expectations in the manufacturing sector have recovered significantly. So at least the manufacturing sector seems to expect the situation in the Middle East to continue to stabilise.”

Dr Dirk Schumacher

“The preliminary results for the Composite PMI for June show a further slight deterioration in business sentiment in Germany, driven by the services sector. This continued downturn suggests that the war in Iran is just one factor weighing on business sentiment. It is also noteworthy in this context that sentiment among French businesses improved significantly in June. There is no question that the end of the Iran war and the decline in oil prices will have a positive impact on the German economy. However, today’s figures suggest that this alone will not be enough to trigger a renewed acceleration later in the year. Fiscal stimulus and further reform efforts are necessary for a lasting improvement in sentiment.”

Dr Dirk Schumacher

"Kevin Warsh certainly imagined a different start. The US consumer price index (CPI) recently rose to 4.2 percent year-on-year, reaching its highest level in three years. At the same time, the labor market remains surprisingly robust, making interest rate cuts unlikely for the foreseeable future. Increasingly, rate hikes are being discussed as a risk scenario. This debate will likely gain relevance with the duration of the Iran war. Consequently, Warsh faces a balancing act right at the start of his term. Although US-President Donald Trump explicitly emphasized Warsh's independence during the handover, political expectations for lower borrowing costs inevitably resonate in the background. The new Fed chair must now manage expectations for both the markets and the White House."

Dr Stephan Bales

“The ECB is expected to raise interest rates by 0.25 percentage points on Thursday. The message from the Governing Council has been very clear. This move is intended to send a signal to the financial markets, as well as to businesses and households, that the ECB is keeping a very close eye on inflation trends. Uncertainty regarding the future course of the economy and price developments remains very high. A sharp economic slowdown in the coming months would do the ECB’s work for it – and render further interest rate hikes unnecessary. There will therefore be no clear signal on Thursday of further monetary tightening. Instead, President Lagarde is likely to speak primarily in the subjunctive and emphasise the need for further data to gain clarity on the future course.”

Dr Dirk Schumacher

"Following several very strong quarters, US economic growth is cooling off as expected, reaching an annualised rate of 1.4% in the fourth quarter. The government shutdown between October and mid-November throttled momentum through reduced government spending and delayed consumption effects. All in all, 2025 reflects a solid growth rate of 2.2%, which is remarkable given the high level of political uncertainty and dynamic policy shifts. A key driver was the high level of investment in Artificial Intelligence, which remained largely unfazed by economic policy turbulence throughout 2025. In parallel, private consumption continues to support growth despite dampened sentiment. A decisive factor for the future trajectory will be whether the clouded household confidence begins to weigh more heavily on spending behaviour."

Dr Stephan Bales

“Today's slowdown in production follows three consecutive monthly increases. With an increase of 0.9 per cent compared to the third quarter, quarterly momentum remains strong. Together with the excellent order intake, which will only have an impact on production after a delay, the trend reversal in production in this country is likely to be completed soon. Overall, this is a solid foundation, perhaps even a springboard for growth in 2026."

Dr Sebastian Wanke

„In its flash estimate, the Federal Statistical Office calculated that German GDP stagnated in the third quarter. We should not generally attach too much importance to this figure (0.0%). Experience in recent years has shown that initial growth calculations are highly susceptible to revision. What was initially predicted to be quasi-stagnation in 2023 and 2024 turned out to be a significant recession in retrospect. As the name suggests, even the initial official growth rates are only estimates based on incomplete data. The decisive factor is the overall picture provided by the growth figures and the so-called soft indicators from company surveys such as the Purchasing Managers' Index or the ifo Business Climate Index. Measured against this, the economic picture for the third quarter is also only mixed, which roughly corresponds to the reported stagnation.”

Dr Philipp Scheuermeyer