European Central Bank (ECB) President Christine Lagarde addresses the media after the ECB's Governing Council meeting, at the ECB headquarters in Frankfurt, Germany, June 5, 2025. REUTERS/Heiko Becker

FRANKFURT, June 5 (Reuters) - The European Central Bank cut interest rates as expected on Thursday and kept all options on the table for its next meetings even as the case grows for a summer pause in its year-long easing cycle.

Following are highlights of ECB President Christine Lagarde's comments at a news conference after the policy meeting.

ON THE IMPACT OF TARIFFS

"... We believe that the impact of tariffs on (exports to the U.S.), if and when they materialise ... will impact predominantly on 2026 and will then be significantly offset by the expected investment in both military equipment and construction or infrastructure..."

NOT CONFIRMING PAUSE

"I'm not confirming here now...a pause."

NOT SEEING MAJOR SHOCKS

"Neither do I say anything about future decisions which you know would only be predicated on major shocks that we are not seeing at the moment."

GETTING TO CYCLE END

"With today's cut and the current level of interest rates... I think we are getting to the end of a monetary policy cycle that was responding to compounded shocks, including COVID, including the war in Ukraine, the illegitimate war in Ukraine, and the energy crisis.

"But of course, we are now into a different time, with different players, with different partners, with different policies, and we will continue to analyse and assess and measure and make sure that we deliver on our 2% medium term target."

SIGNIFICANT UNCERTAINTY

"For the moment we are facing significant uncertainty - you will read in the... monetary policy statement. I think we quote uncertainty 9 or 10 times."

GOOD POSITION

"We are in a good position.

"And we are in a good position on the basis of the current rate path, and with the 25 basis point cut that we decided so that we can face the uncertainties that are coming our way.

"As you have heard in the monetary policy statement, we will decide meeting by meeting on the basis of data, and we will assess as and when the data come in whether or not that position is secure in order to deliver our 2% medium term target.

"What I am saying is that today we are in that good position."

ON SPECULATION LAGARDE MIGHT LEAVE THE ECB EARLY

"I can very firmly tell you that I have always been, and I am, fully determined to deliver on my mission, and I'm determined to complete my term."

RATE DECISION 'ALMOST UNANIMOUS'

"I can also tell you that it was an almost unanimous decision. There was one Governing Council member, who did not support the decision. But other than that, it was virtually unanimous, so I would call it either very broad consensus or virtually unanimous support for the decision to cut by 25 basis points."

INFLATION OUTLOOK MORE UNCERTAIN

"The outlook for euro area inflation is more uncertain than usual."

MAKING EURO ZONE MORE COMPETITIVE

"In the present geopolitical environment it is even more urgent for fiscal and structural policies to make the euro area economy more productive, more competitive.

"Recently announced measures to step up defence and infrastructure investment should also bolster growth in the present geopolitical environment."

TRADE RISKS

"A further escalation in global trade tensions and associated uncertainties could lower euro area growth by dampening exports and dragging down investment and consumption... By contrast, if trade and geopolitical tensions were resolved swiftly, this could lift sentiment and spur activity."

DOWNSIDE GROWTH RISKS

"Risks to economic growth remain tilted to the downside."

INFLATION TO STABILISE

"Most indicators of underlying inflation suggest that inflation will stabilise sustainably at a 2% medium term target."

TARIFFS

"Higher tariffs and a stronger euro are expected to make it harder for exporters."

WEAKER PROSPECTS

"Survey data point overall to some weaker prospects in the near term. While manufacturing has strengthened, partly because trade has been brought forward in anticipation of higher tariffs, the more domestically oriented services sector is slowing."

(Reporting by Reuters Global News Desk)