Central banks in Europe continue to mitigate the agenda even with the Federal Reserve remaining firmly

Written by Palazas Kirani and Heard Schneider

Frankfurt (Reuters) -Central Banks in Europy stand in a flagrant contradiction with its counterpart in the United States on Thursday, and reduce interest rates or hints to reduce the next policy, even when the federal reserve kept a fixed hand overnight and left investors guessing its next step.

Most of the largest central banks in the world have reduced borrowing costs this year due to the slowdown of inflation and the spacing of the Federal Reserve, and the trend is usually in the world, as the United States can now face an increase in the repercussions of a global trade war.

The definitions will not be proportional to the United States, the largest consumer in the world, as new duties besides the sharp weakness of the dollar make imported goods more expensive. On the contrary, the rest of the world may face slower inflation through the weakest trade, a stronger currency against the dollar and the low energy costs.

The Bank of England has reduced interest rates by 25 basis points and alluded to more mitigation, while Rix Bank Bank in Sweden and Norway Bank in Norway said that the price cuts are likely to come, indicating the three tariffs as a threat to growth.

The European Central Bank, which only meets in early June, is a market to reduce its eighth rate in 13 months, on the pretext that inflation is now on the goal and that the customs tariff will harm growth.

In contrast, the Federal Reserve warned on Wednesday evening that the turmoil could lead to high inflation and unemployment, which opposes the forces that call for various political responses, hinting that the world may face a long wait for a clearer direction.

“There is no real cost to wait for us at this stage,” said Jerome Powell, Chairman of the Federal Reserve, said. “There must be some increase in inflation, there must be some increase in unemployment. Those that call for different responses.”

On the other hand, the Bank of England did not indicate any reason to wait because it reduced its main rate to 4.25 % and even discussed a larger step, with a warning that the customs tariff has increased uncertainty and is likely to reduce global growth.

“The past few weeks have shown the unpredictable global economy. For this reason we need to adhere to a gradual and accurate approach for further discounts in prices,” said Andrew Billy, the governor of the Bank of England.

Central banks in Norway and Sweden have maintained rates unchanged at the present time, but both made explicit signals to reduce the next possible policy.

“The uncertainty resulting from the new American trade policy may put down pressure on inflation in Europe,” said Riksbank. “The short -term inflation forecast increased in the United States, while it fell in the euro area.”