The ECB all but declared victory over inflation on Thursday, when Christine Lagarde — who may or may not leave the bank early to take to the top job at the World Economic Forum — cut rates by a quarter-point, as expected.

It was the eighth cut of the cycle. Or the 10th, depending on who you ask. Earlier this week, while shouting at Jerome Powell on social media, Donald Trump said the ECB “has lowered NINE TIMES!” So Thursday makes 10 on his count, I suppose.

I’m going to go with eight, though because… well, because that’s the real number, and quaint as this is in 2025, I still harbor an affinity for facts.

As the figure below shows, this really did work out pretty well for Lagarde, all things considered.

Obviously, what happened in 2022 on the inflation front was a disaster, and as I’m keen to remind readers, macro disasters are generally human disasters. With that oh-so-important caveat, what you see in the chart can quite fairly be described as the best possible result, again considering the difficult circumstances.

I don’t want to give too much credit where it isn’t due, but I gotta say: The combination of subsidies at the national level (which shielded European consumers from the worst of the energy crunch) and the ECB’s determined, but not panicked, tightening campaign, prevented a crisis from morphing into something existential.

Why not “too much credit”? Well, two reasons. First, the euro-zone economy’s notoriously moribund, which is to say not especially fertile ground for hyperinflation. Light stagflation, yes, but runaway consumer price growth, not so much. Second, the energy crunch eased “on its own” (i.e., as a result of factors that had nothing to do with monetary policy), and that played a huge role in bringing down price growth.

So, the ECB’s success in returning inflation to target expeditiously probably doesn’t deserve to be studied by future central bankers as some kind of blueprint, but it’s hard to find fault with the outcome.

“Inflation is currently at around the Governing Council’s 2% medium-term target,” the bank said Thursday, in the June policy statement. The new forecasts show headline inflation averaging exactly 2% this year and 1.6% in 2026. Those forecasts in March were 2.3% and 1.9%. The downward revisions are attributable in part to “lower assumptions for energy prices,” but also to currency strength.

That latter point (about the euro) is important. The dollar’s trials and tribulations in “Trump 2.0” have opened the door to an expanded role for the euro in global trade and finance. The common currency could benefit from diversification flows away from the dollar into, for example, German bunds.

Of course, a stronger currency can hurt export competitiveness, but it’s not a stretch to suggest Brussels would be willing to countenance that trade off at least to a point. More demand for high-quality, euro-denominated fixed income could be advantageous going forward if the bloc’s compelled to, for example, provide more for its own defense.

The new ECB staff projections show core inflation averaging 2.4% in 2025 and 1.9% in 2026, more or less unchanged from the March forecasts.

Notably, staff also assessed different trade scenarios and their impact on growth and inflation. In the European context, “a further escalation of trade tensions” would result in lower growth but also lower inflation compared to the baseline projections. That’s in contrast to the Fed’s outlook for the US, which essentially says growth will be lower but inflation higher in the presence of additional trade escalations.

The ECB’s forward guidance was unchanged. The GC emphasized data-dependence and the utility of a meeting-by-meeting approach “especially in current conditions of exceptional uncertainty.”