Europe Could be a Big Loser in U.S.-China Trade War, ECB Warns

Date: 10 February 2025 - 22:38

News ID: ۱۳۶۷۵۷

FRANKFURT (Euronews) - European Central Bank interest rates have room to fall further as inflation moderates, ECB board member Piero Cipollone said, warning that the U.S. administration’s trade war with China could have a detrimental impact on the 20-member euro zone.
The ECB has lowered borrowing costs five times since June as growth concerns start to trump price worries, and investors see at least three more rate cuts this year in a bid to boost an economy struggling to rebound from two years of near stagnation.
“We all agree there is still room for adjusting rates downwards,” Cipollone told Reuters in an interview. “We are almost on target... we are still in restrictive territory.”
But higher energy prices and global trade tensions are tugging the ECB in different directions, so there is no sense in committing to any specific move for now, including a widely anticipated and fully priced in cut in March, Cipollone added.
Still, the euro zone economy has not fundamentally changed since December, when the ECB’s projections assumed four rate cuts in 2025, including a move already delivered in a unanimous decision last month.
“The overall understanding of where we are going is there, the fundamentals haven’t changed, so I do not expect a big change in direction,” Cipollone said. “This convergence with the inflation target is coherent with a declining interest rate path.”