Francois Villeroy de Galhau, a policymaker with the European Central Bank (ECB) and the head of the Bank of France, stated on Wednesday that a potential 25 percentage point increase in US tariffs during the second quarter would likely have a limited effect on European inflation. However, he cautioned that such a move could still reduce the Eurozone’s Gross Domestic Product (GDP) growth by 0.3% over the course of a year, according to Reuters.
Key Remarks
Villeroy de Galhau criticized US President Donald Trump’s policies, stating, “Trump is destabilizing the multilateral system, increasing long-term risks for financial order and the climate.” He also added that in the short term, Trump’s approach was harmful to the US itself, a point echoed by the Federal Reserve’s recent downgrade of its economic forecasts.
Market Reaction
Despite the remarks, the EUR/USD exchange rate showed little reaction, trading nearly unchanged at 1.0795 as of the latest update.
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