Trump’s return has destabilized global economic policy discussions at a key ECB summit
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Five months into Trump’s second presidency, the economic fallout has become impossible to dodge, and on Tuesday, it officially hijacked the agenda of the world’s top monetary officials. At the European Central Bank’s annual retreat in Sintra, Portugal, Federal Reserve Chair Jerome Powell, ECB President Christine Lagarde, Bank of England Governor Andrew Bailey, Bank of Japan Governor Kazuo Ueda, and Bank of Korea Governor Rhee Chang-yong sat side by side for a public panel that, according to Bloomberg, wasn’t about strategy anymore, it was about surviving Trump. With tariffs flying, inflation rising, and global trade thrown into a blender, all five officials are now stuck juggling growth risks and inflation threats directly linked to White House policy. Christine and Powell haven’t been on a panel together since the same ECB event in 2024. That session ended up sounding more like a therapy group for central bankers stuck in political chaos. One year later, it’s no longer about stress; it’s now about real economic paralysis. Central banks freeze as Powell signals caution Powell said the Federal Reserve will not rush into any decision on interest rates, even as the US economy starts to cool. Consumer spending has slowed, and core inflation keeps rising. That mix has left the Fed stuck in a gray zone, unsure how aggressive it should be. Bloomberg economist Stuart Paul explained, “Quickening core inflation and slowing spending will keep the Fed uneasy, fueling debate about the appropriate number of rate cuts this year.” The Bank of England earlier this month also paused its rate changes, while Christine’s ECB, after cutting rates once recently, has signaled no follow-up moves for now. Japan’s central bank isn’t expected to touch its benchmark rate before July 31, and South Korea’s monetary team is keeping a careful approach. All five are effectively…
Filed under: News - @ June 29, 2025 5:06 am