ZURICH, Switzerland: A wave of central banks across Europe surprised markets last week by lowering interest rates, responding to easing inflation and rising fears over global trade disruptions — many tied to U.S. President Donald Trump’s tariff threats and the growing instability in the Middle East.

The Swiss and Norwegian central banks led this week’s moves, becoming the latest to cut rates. The Bank of England held steady but flagged a downward bias, while the U.S. Federal Reserve kept its benchmark rate unchanged, citing persistent domestic inflation.

“Inflationary pressure has decreased compared to the previous quarter,” said the Swiss National Bank, which cut rates by 25 basis points to zero and left the door open for negative rates if needed.

Norway’s central bank, long seen as the most hawkish in Europe, also unexpectedly trimmed its policy rate by 25 basis points. “Inflation has declined since the monetary policy meeting in March,” Governor Ida Wolden Bache said, noting a softer inflation outlook with May’s figure at 2.8 percent.

Sweden’s central bank similarly cut rates to 2.00 percent from 2.25 percent and signaled more easing could follow to support sluggish growth. The European Central Bank, which cut rates on June 6 for the eighth time in a year, has now signaled a temporary pause, declaring that inflation has returned to its 2 percent target after years of overshooting.

Meanwhile, the Fed painted a more mixed picture. Chair Jerome Powell noted that U.S. consumer prices are likely to rise as Trump’s proposed import tariffs take effect, even as growth slows. “No one holds these … rate paths with a great deal of conviction,” Powell said, stressing all decisions remain data-dependent.

Trump, who has criticized Powell repeatedly, claimed that the Fed’s reluctance to cut rates is driving up government borrowing costs. “Jerome Powell is costing our Country Hundreds of Billions of Dollars… We should be 2.5 Points lower,” he posted on Truth Social.

The Bank of Japan also left rates unchanged this week, with Governor Kazuo Ueda highlighting downside risks, especially from U.S. tariffs.

Whether global inflation stays subdued could now depend on how far the Middle East conflict escalates and whether other countries retaliate against Trump’s tariffs. Trump has said sweeping increases will begin July 9 unless trade deals are struck.