Snapshot 3:Thu, Jul 24, 2025 7:32:59 PM GMT last edited by MalcolmStanding

ECB Holds Rates Steady at 2% Amid US Trade Uncertainty

Published JUL 24 2025

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The Spin

ThisThe ECB's pause couldmakes beperfect asense mistakegiven ifcurrent tradeconditions. tensionsInflation escalate.is Higherright tariffsat willtarget, slamthe Europeaneconomy exportersshows andresilience dragwith downsolid growth, makingand anotherunemployment rateremains cuthistorically inevitablelow. byImportant September.to Thenote ECBalso shouldis havethat actedEurope's preemptivelyinflation ratheris thanmostly waitinguntethered forfrom damagetariff toconcerns, materialize.meaning Economicthat momentumthe isbank alreadymust slowing,be andconservative delaywith risksrates fallingcuts behindand thenot curveabandon sensible planning.

European Conservative

This pause could be a mistake if trade tensions escalate. Higher tariffs will slam European exporters and drag down growth, making another rate cut inevitable by September. The ECB should have acted preemptively rather than waiting for damage to materialize, especially if the notoriously capricious Trump opts for a much higher tariff rate, which would cause serious economic damage.

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