The easing of the tariff deadlock does not change the loose stance; a reduction in interest rates by the European Central Bank in June is almost certain.
Due to the expected long-lasting damage to the economy caused by USA tariffs, European Central Bank officials are preparing to further lower interest rates.
The consensus within the ECB on lowering interest rates in June has further strengthened.
① Central bank governors of European countries are becoming more confident about a rate cut in June, as business growth in the eurozone stagnates, wage increases slow down, and inflation continues to decrease; ② Apart from the data, since Trump's temporary 20% tariff on European commodities is not expected to provoke a countermeasure, the European Central Bank believes that the upward momentum of inflation in Europe will decrease in the short term; ③ The European Central Bank may cut interest rates by 25 basis points in June, but will not make a large cut to avoid causing market concerns.
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ECB to Consider Strategy Shift for Improved Response to Price Shocks - Bloomberg
