European Central Bank Executive Board Member: U.S. Tariffs Weighing on Economic Growth, Further Rate Cuts Needed

On May 9th — The board member of the European Central Bank (ECB), Olli Rehn, stated that as the Eurozone economy has not yet fully felt the impact of U.S. tariffs, he anticipates that inflation will continue to decelerate. However, the ECB must further reduce interest rates. He mentioned that although economic activity initially exhibited strong performance, recent geopolitical trends, including President Trump's trade threats, have been unfavorable news. At the same time, he observed "clear anti-inflationary factors" at work. He said, "For me, the decision in June is very evident; we need to cut rates once again." He also said, "It is possible to cut rates again after June," although the timing remains unclear. Since last June, the ECB has cut rates seven times. Officials have stated that they are prepared to take more measures as U.S. tariffs pose a threat to economic growth. (FXStreet)