The tariff policies in US President Donald Trump wandering to the path forward to find out interest rates in the European Central Bank “more complicated”, according to Pierre Wench, a member of the Board of Directors of the European Central Bank.
“We were walking in the right direction,” said Karen Tsu from CNBC.
And Wenche said: “If we forgot the customs tariff …. We would go in the right direction. Then the question was more question about controlling the pace of discounts and where we play.” “I was like, as you know, inflation may be the boring part of (20) 25, and (20) 25 is not a boring year. But if you add a tariff to the equation, it has become more complicated,” he said.
Wench, who is also the governor of Belgium Bank, said that the customs tariff will be “bad for growth” and “perhaps” inflation, but noted that the precise impact is still uncertain and will depend on any possible revenge and how exchange rates interact with duties.
His comments come a day after Trump announced 25 % definitions on all cars “not made in the United States”, as of April 2.
These are just the latest developments in Trump’s commercial disturbances, which have witnessed a large number of definitions announced – sometimes they were postponed, modified or canceled, as negotiations and counter measures were also operated.
April 2 is scheduled to be a major date for a wide range of duties that enter into force, although the recent comments from Trump and his administration indicated that adjustments can be made and that duties may be easier than originally shown.
Next interest rate decisions
The European Central Bank will take the following interest rate decision on April 17, shortly after the start of the customs tariff. The last markets in the market were approximately 79 % of the rate of interest from 25 Basis from the European Central Bank next month, according to LSEG data.
By that time, Wenche said that the central bank could have an approximate idea of the impact of definitions, which could affect the decision of the European Central Bank. However, he said that he “will not focus much on April”, because commercial policy will have a medium -term effect.
On Thursday, the central bank left the door open to all possible measures from the European Central Bank regarding interest rates – more cuts, rise or stopping.
“I think the possibility is still limited because we will have to go, but there may be an issue to stop temporarily,” he said.
“If the definitions have an inflationary effect and a negative impact on growth, it will be a difficult equation, and we may have to think about a temporary stop. I am not dealing with one, but I think it should be part of the discussion,” he said.
Financial tariff policy for the tariff
On Thursday, the Wunsch policy maker reported that recent fiscal policy transformations in Europe could reduce the impact of definitions.
Germany Earlier this month, her constitution amended in what was described as a financial transformation, which led to changes to her long debt policies to enable higher defensive spending and create a special fund of 500 billion euros ($ 539 billion).
Meanwhile, it also has the European Commission Moves Towards the main defense package, pledged to fill up to 800 billion euros to enhance security spending.
Although it is still unclear what will come exactly from the European Union plans, “what will happen in Germany is … important,” according to Wunsch.
He said that the country’s measures “can, to some extent, to a large extent, in the medium term, to compensate for the customs tariff in the United States.”
Wenche pointed out that the effects of definitions and the balance of financial expansion, the remaining effect of the customs tariff can be about increasing inflation to the top, saying that this was a reason to look not only in April, but also took a long -term offer over two or two years.
“The danger may be in the upper direction on the inflation front,” he said.
https://image.cnbcfm.com/api/v1/image/108121970-1743069438906-gettyimages-2189679887-108436311.jpeg?v=1743069476&w=1920&h=1080
Source link