European Central Bank papers reduce 2.25 % rates in the Trump trade war

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The European Central Bank reduced the standard interest rate by a quarter of a point to 2.25 percent, as it prepares for economic repercussions from the trade war that US President Donald Trump ignited.

Thursday’s decision unanimously by the standards of prices for the European Central Bank, which brings borrowing costs in the currency bloc to its lowest levels in more than two years, was widely expected after Trump’s announcement of embodiment Definitions In most trading partners in the United States on April 2.

The European Central Bank said, “The growth expectations have deteriorated due to the high trade tensions,” adding that “the harmful and volatile response in the market” is likely to have a “tightening effect on financing conditions” for companies and consumers.

European Central Bank President Christine Lagarde shed light on the “exceptional uncertainty” facing the economy.

She said: “The exporters in the euro area face new obstacles to trade, although their scope is still unclear,” adding that “the disruption of international trade, financial market tensions and geopolitical certainty are burdening with business investment.”

Before the decision, Trump is a comparison The European Central Bank’s price reduction with the American Federal Reserve, which kept suspended prices at its last meeting in March.

Trump said that the Federal Reserve Speaker Jay Powell, who warned on Wednesday of the impact of definitions on the growth and enlargement of the United States, was “very late and error” and “his termination could not come quickly enough!”

the European Central BankThe reduction this week is the seventh reduction since it started to reduce the deposit price last June.

Traders stuck to their bets, which are no less than two other discounts in a quarter of points by the end of this year, and raised the chance of a third reduction to about 60 percent, according to the levels involved in the bitement markets.

German bars increased, with a two -year revenue decreased 0.07 percent to 1.68 percent.

The euro did not change slightly at $ 1.136 in trading after the reduction.

“Increased global trade disorders” increased the uncertainty in inflation.

She said this, while the European Central Bank knows that the American definitions were “negative
The trauma of demand “with” some effect on growth “, the effect on inflation will become more clear over time.

On the one hand, Lagarde, low energy prices, said that euro is stronger and increased imports from China may reduce inflation. She added that the fragmentation of supply chains can increase the upward pressure on prices, as well as high government spending on defense and infrastructure.

Trump, under a partial session last week, delayed the “complete mutual tariff” of 20 percent on the European Union commodities for a period of 90 days, and the average of 10 percent will be applied during the time. But senior central bankers say his protectionist policies are still likely to be a negative economic shock to the euro area.

The European Central Bank is already facing growth pressure and cooling prices. In March, the central bank reduced its growth forecast for 2025 for the euro area to 0.9 percent – a sixth consecutive reduction.

Inflation decreased last month to 2.2 percent – marginally higher than the goal of the European Central Bank by 2 percent – as service prices rose slowly for about three years.

Economists say inflation can increase the drop in oil prices for this month, the last rise in the euro against the dollar, and a possible increase in Chinese imports to the euro area. All three developments are widely seen as consequences for Trump’s commercial policy, at least.

But the increase in debt -funded spending in Germany and other places in the eurozone can prove inflationary pressure.