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Capital Economics: Limited Impact from Trade Agreement, European Central Bank Likely to Stay Put
Summary: Despite reports of the EU nearing a trade agreement to limit US tariffs, Capital Economics economist Andrew Kenningham believes the European Central Bank (ECB) is likely to maintain a cautious stance. The Wall Street Journal previously reported that Brussels is considering accepting a plan for most EU goods exported to the US to face a ...
Despite reports of the EU nearing a trade agreement to limit US tariffs, Capital Economics economist Andrew Kenningham believes the European Central Bank (ECB) is likely to maintain a cautious stance. The Wall Street Journal previously reported that Brussels is considering accepting a plan for most EU goods exported to the US to face a 15% tariff, lower than Trump's threat of 30% but higher than current rates. Kenningham's analysis suggests limited impact on the Eurozone economy, indicating that ECB President Lagarde and colleagues at the policy meeting in Frankfurt are unlikely to change their stance. 'While the agreement may prevent a destructive escalation of trade barriers, the actual impact is slightly unfavorable compared to the economic assumptions underlying the ECB's baseline forecasts,' Kenningham stated.
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Link: Capital Economics: Limited Impact from Trade Agreement, European Central Bank Likely to Stay Put [Copy]
