The European Central Bank’s account of its 3–5 June policy meeting, published on Thursday, shows policymakers expect most measures of underlying inflation to converge on the 2% target over the medium term. Staff project headline price growth to dip below target in 2026 before rebounding, making that year pivotal for anchoring expectations. Governing Council members judged that, after eight rate cuts in the past year—including the 25-basis-point move that brought the deposit facility rate to 2.0% in June—borrowing costs are now “firmly neutral” and may already be accommodative. A minority argued for holding rates steady, underscoring a debate over whether additional easing is warranted. The minutes flag mounting downside risks to activity. Survey evidence points to softer euro-area growth in the second quarter, while officials cautioned that elevated trade uncertainty, higher U.S. tariffs and the euro’s appreciation could sap exports and investment. Staff said further escalation of trade tensions would leave both growth and inflation below the baseline forecast. Even so, several members warned the projections might underestimate medium-term inflationary pressures arising from supply-chain shifts, fiscal expansion and de-globalisation. The June rate reduction was seen as helping to buttress inflation expectations and prevent an unwarranted tightening in financial conditions, but the Council stressed future decisions will remain data-dependent and taken meeting by meeting.