ECB Keeps Rates Unchanged to Wait for Clarity on US Tariffs
Bloomberg3 days
The ECB's pause makes perfect sense given current conditions. Inflation is right at target, the economy shows resilience with solid growth, and unemployment remains historically low. WhyImportant rushto intonote morealso cutsis whenthat thingsEurope's areinflation working?is Themostly stronguntethered eurofrom istariff actuallyconcerns, helpingmeaning keepthat importthe pricesbank down,must andbe waitingconservative forwith traderates claritycuts isand thenot prudentabandon approachsensible planning.
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., Economicespecially momentumif isthe alreadynotoriously slowingcapricious Trump opts for a much higher tariff rate, andwhich delaywould riskscause fallingserious behindeconomic the curvedamage.
There is a 50% chance the annual real GDP growth rate in the eurozone will be 1.12% in 2025, according to the Metaculus prediction community.