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.
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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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