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Trump's Tariffs Trigger Disinflation, ECB Slashes Rates

4/25/2025

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Summary

Story summary

President Trump's tariffs, unveiled on April 2, could spark disinflation in Europe instead of the expected inflation. The European Central Bank has responded by slashing rates, with further cuts likely as commodity prices fall and demand weakens. Economists foresee a 1.25% deposit rate by December, highlighting growing worries over sluggish growth and inflation in the region.

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Story summary

President Trump's tariffs, unveiled on April 2, could spark disinflation in Europe instead of the expected inflation. The European Central Bank has responded by slashing rates, with further cuts likely as commodity prices fall and demand weakens. Economists foresee a 1.25% deposit rate by December, highlighting growing worries over sluggish growth and inflation in the region.