The economic hit from reciprocal tariffs, elevated uncertainty, and tightening financial conditions appears to be more severe than the ECB had anticipated. Moreover, the assumption that tariffs would prove inflationary is now being challenged, with disinflationary forces increasingly dominant.
While post-tariff-pause guidance may be only mildly dovish, Deutsche Bank stresses that the ECB must remain agile in the face of a complex and evolving shock. The firm maintains its view that the terminal rate will settle at 1.5%, warning that markets may still be underestimating the risk of disinflation.
The ECB statement is due at 1215 GMT / 0815 US Eastern time
European Central Bank President Lagarde's press confernce follows at 1245 GMT / 0845 US Eastern time This article was written by Eamonn Sheridan at www.forexlive.com. Read More Details
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