ECB Governing Council Member Highlights Inflation Risks from Trade War

In a recent conference in Amsterdam, Klaas Knot, a member of the European Central Bank (ECB) Governing Council and President of De Nederlandsche Bank (DNB), issued a stark warning about the long-term effects of the ongoing global trade war. Describing it as a "negative supply shock," Knot emphasized the potential inflationary impact of the tariffs imposed by the United States administration.

Call for Vigilance and Strengthening the EU Internal Market

Knot pointed out the risk of reverting to a supply/demand scenario similar to that of 2022, urging the European Union to bolster its internal market to mitigate these effects. "We have to be vigilant about inflation," he stated, highlighting the need for proactive measures to safeguard the economy.

ECB's Upcoming Meeting: No New Projections Expected

Additionally, Knot mentioned that the ECB will not present new inflation and growth projections at its meeting next week, signaling a cautious approach in these uncertain times.