ECB Raises Alarm Over US Tariffs Impact

The European Central Bank (ECB) has issued a stark warning regarding the escalating global trade tensions, primarily fueled by the latest round of US tariffs. These developments, according to the ECB, are casting a shadow over the economic prospects of the eurozone.

Economic Bulletin Highlights Concerns

In its recent Economic Bulletin, the ECB pointed out that the timing of rate cuts, amidst increasing uncertainty, could potentially hinder the region's already delicate recovery process. "The current disruptions to international trade, coupled with financial market tensions and geopolitical uncertainties, are adversely affecting business investments," the bulletin stated.

Resilience Amidst Challenges

Despite signs of easing inflation and the resilience of domestic demand, the ECB underscored the potential for worsening trade frictions to dampen both investment and consumption. With the eurozone economy recording a modest growth of just 0.2% in the last quarter of 2024, its vulnerability to external shocks remains a critical concern for policymakers aiming to stabilize inflation around the 2% target.