The European Central Bank (ECB) has cut its main interest rate by 0.25 percentage points, citing escalating trade tensions following US President Donald Trump’s tariffs which have ignited a global trade war. While eurozone countries have developed resilience against global shocks, economic growth prospects have worsened due to rising trade tensions, according to the ECB. Central bank President Christine Lagarde noted that disruptions in international commerce and financial market tensions are affecting business investment. A potential consequence of the trade war could be a surplus of manufactured goods leading to deflationary pressures. In contrast, the US Federal Reserve maintained steady rates during its last policy meeting in March. Lagarde emphasized the importance of central bank independence from government intervention, supporting her counterpart Jerome Powell amidst criticism from President Trump.
— new from CNN
