From Morningstar: 2025-04-04 08:56:00

Global markets are reeling from the US tariff announcement, prompting investors to reassess economic outlooks. The ECB may cut interest rates on April 17 due to trade war concerns. Markets expect rate cuts in April and June, possibly a third later in the year. ECB officials are divided on the timing of cuts.

Tariff announcements have increased the likelihood of an ECB rate cut on April 17. Deutsche Bank predicts more decisive rate cuts due to redirected Chinese exports to Europe. Berenberg Bank expects one rate cut in Q2, with potential for additional cuts to address economic damage. Growth concerns dominate.

ECB key interest rates currently stand at 2.5% for the deposit facility rate, 2.65% for the main refinancing rate, and 2.9% for the marginal lending facility. President Trump’s tariffs have spurred Europe to prepare countermeasures. The EU is ready to respond with tariffs on US goods if negotiations fail.

ECB President Lagarde urges unity in the face of shifting global dynamics, calling for a “European moment” to integrate capital markets. Vice-President de Guindos remains cautious about the inflation outlook amid trade tensions. ECB staff forecasts fragile GDP growth and increasing uncertainty in 2025.

Germany, Italy, and the Netherlands are vulnerable to the impact of tariffs, with high uncertainty hindering investment. The ECB’s March accounts highlight unprecedented uncertainty, particularly in trade policy. The next ECB meetings in 2025 are scheduled for April 17, June 5, July 24, Sept. 11, Oct. 30, and Dec. 18.



Read more at Morningstar: How Will Trump’s Tariffs Affect Eurozone Interest…