ECB Official Warns of Inflation and Interest Rate Hikes Due to US Tariffs

Klaas Knot, a prominent figure at the European Central Bank (ECB), has raised concerns over the potential economic repercussions of the latest tariffs imposed by US President Donald Trump. According to Knot, these measures are likely to fuel inflation and push interest rates upwards in the United States, with possible negative impacts on the euro's strength.

During an interview on Dutch television, Knot highlighted the detrimental effects of trade wars, emphasizing that they harm all involved parties and often result in retaliatory actions. "Europe is not to be underestimated. With 400 million consumers, we represent a significant trade bloc," stated Knot, who also heads the Dutch central bank.

He further explained that the imposition of tariffs would inevitably lead to increased consumer prices in the US, prompting the Federal Reserve to adjust interest rates upwards. This scenario could have economic repercussions extending to Europe, affecting its financial stability and market dynamics.