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ECB’s Schnabel says higher prices from tariffs could limit rate cuts

9 May 2025
in World
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ECB’s Schnabel says higher prices from tariffs could limit rate cuts
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A top European Central Bank (ECB) official, Isabel Schnabel, cautioned that global trade wars could elevate inflation in the Eurozone, limiting interest rate cuts. Speaking at Stanford, she noted that rising tariffs and increased fiscal spending, particularly in Germany, could sustain upward inflation pressure, contradicting a dovish outlook among economists predicting rate cuts. Despite April’s Eurozone inflation steady at 2.2%, Schnabel emphasized the medium-term inflation risks tied to protectionism and supply chain disruptions, urging careful monetary policy management.

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