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The European Central Bank has reduced its reference interest rate by a quarter to 2.25% while it is preparing for the economic benefits of the trade war ignited by US President Donald Trump.
Thursday's drop, which brings borrowing costs to the currency block to their lowest for more than two years, had been widely expected after Trump's announcement to sweep price On most American business partners on April 2.
Before the decision, the The American president compared The BCE rate reduction file with the American federal reserve, which kept the rates pending during its last meeting in March.
Trump said that the president of the Fed, Jay Powell, who had warned the impact of prices on the United States growth and inflation, was “always too late and bad” on Wednesday and that “the end cannot come quickly enough!”
THE ECBThis week's reduction is the seventh reduction since it started to reduce its deposit rate last June.
The merchants expect at least two additional reductions of a quarter of a point by the end of this year, according to the levels involved by the exchange markets before the decision.
The euro was little changed to $ 1,136 immediately after the cut.
Trump made a partial turnover last week, delaying his “reciprocal rates” of 20% on EU products for 90 days, during which a rate of 10% will apply. But the best central bankers claim that its protectionist policies are still probably a negative economic shock for the euro zone.
The ECB is already faced with slower cooling prices and pressures. In March, the central bank reduced its growth forecasts in 2025 for the euro zone to 0.9% – its sixth consecutive reduction.
Inflation dropped last month at 2.2% – slightly above the BCE 2% target – because the prices of the services increased at their slowest rate for almost three years.
Economists say that inflation could be whispered further by the drop in oil prices for this month, the recent increase in the euro against the dollar and a potential increase in Chinese imports in the euro zone. The three developments are widely considered as consequences of Trump's trade policy, at least in part.
But the increase in expenses financed by debt in Germany and elsewhere in the euro zone could prove to be inflationary pressure.
