The European Central Bank is expected to trim interest rates by 25 basis points on Thursday. That would take its key rate, the deposit facility rate, to 2%. But there's a lot of uncertainty around what the central bank could do next.

It was the eighth rate cut in the past year, extending the bank’s divergence from the Federal Reserve, which has held rates steady since the end of last year.

Lagarde’s guidance that policy is “well positioned” and upbeat forecast changes suggest a pause is coming in July