And a rate cut only makes it worse, as per the interest income channels:

Germany’s Ifo Drops in April, Raising Odds of ECB Cut

April 24 (Bloomberg) — Germany’s Ifo index dropped in April, in a further sign that Europe’s largest economy is slowing.

The business climate reading came in at 104.4 down from 106.7 in March and expectations of 106.2.

The weak data follows Tuesday’s weaker-than-expected purchasing managers index (PMI) data.

That sparked speculation that the European Central Bank will cut interest rates at its meeting next week on Thursday.

European shares shrugged off the weak Ifo reading, in a sign the market is cheering a possible ECB rate cut.

The euro fell against the dollar after the Ifo data was released.