Amidst prevailing uncertainties such as trade wars, potential tariffs, and the potential impact of fiscal policy, the European Central Bank (ECB) urges extreme prudence. Luis de Guindos, the ECB’s vice-president, shared these concerns during a conference hosted by the Institute of International Finance in Brussels.
De Guindos remained “cautious,” believing that a data-driven, meeting-to-meeting adjustment strategy is appropriate. The ECB is optimistic that inflation will decline in the coming quarters to its medium-term target of 2%. However, there are concerns that trade disputes may push inflation upward, although the primary impact would likely be felt on the economic growth of the eurozone.
At the April meeting, the ECB’s Governing Council will review data on the evolving situation, hoping for greater clarity on the final outcome of U.S. tariffs and potential European Union retaliation. “Subsequently, we will decide accordingly, but today it is very difficult to say what we will do in April,” stated de Guindos. He reminded that the ECB had already implemented six interest rate cuts since June.
