European Central Bank policymaker Yannis Stournaras warns that US President Donald Trump’s tariffs could lead to a “negative demand shock” in the Eurozone, potentially dragging down economic growth and inflation below targets. Stournaras, a member of the ECB’s governing council, cautions that the looming global trade war comes at a time of already modest growth, with the ECB set to make an interest rate decision on April 17. Analysts predict another rate cut later this month in response to Trump’s tariff announcements, with Stournaras warning that the impact on euro area growth could be between 0.5 and 1 percentage points.
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