The European Central Bank (ECB) has reaffirmed its decision to keep interest rates at 2%. This comes amid threats by Donald Trump regarding potential tariffs on imports.
ECB Decision Amid Trade Threats
The ECB chose not to react to Trump’s trade threats, maintaining the rate at 2%. This decision was made shortly before the summer break, allowing them to assess the impact of potential tariffs. The ECB's stance is that inflation remains under control and any further actions will be considered at the next meeting on September 10-11.
Data That May Influence the Decision
During the next meeting, key data is expected that could impact the ECB's decision-making. Notably, bank lending surveys, consumer confidence reports, and purchasing manager indexes are scheduled to be released. ECB President Christine Lagarde highlighted that 'risks to growth are tilted to the downside.'
Global Markets React to Central Bank Divergence
Global markets are exhibiting uncertainty. In the U.S., housing market expectations remain low. Meanwhile, Canada and other countries are releasing consumer and business sentiment data to gauge economic conditions. In Asia and Africa, mixed economic data is also being observed.
The ECB is currently opting to avoid hasty decisions amid increasing economic pressure and global trade threats. Major decisions will be made at the September meeting when fresh economic data becomes available.
