Impact of Trade Policy Uncertainty on Eurozone

European Central Bank (ECB) President Christine Lagarde highlighted the negative effects of trade policy uncertainty on the Eurozone's exports and investment interest. She pointed out that the threat of tariffs from the United States under President Donald Trump has significantly contributed to this uncertainty.

ECB's Response and Recommendations

During the press conference following the ECB's decision to cut the three key interest rates by 25 basis points, Lagarde called on EU governments to enhance the bloc's competitiveness. This, she believes, is crucial for de-escalating the current tensions and fostering a more stable trade environment.

Inflation Outlook and Monetary Policy

Lagarde also addressed the ECB's inflation outlook, noting that the disinflation process is progressing well. She mentioned that the ECB's monetary policy has become less restrictive, attributing the upward revision of the inflation outlook for 2025 to 2.3% to stronger energy price dynamics.