JPMorgan Chase withdrew its initial expectations as to when central banks in Europe will start raising interest rates. The change of opinion is argued by the tensions surrounding the trade war, the slow economic growth and the loosening of the monetary policy by the Fed.
After the Trump administration threatened Mexico with new tariffs, JP economists have already thought the Fed will cut the base rate by 0.25 basis points in September and December this year. Their expectations are also for the EU to undergo an increase in tariffs.
Economists agree that uncertainty about how ECB will react to economic shocks remains high. The ECB has not yet indicated what measures it will take, despite the fact that inflation is already long behind the Bank's target.
Source: Bloomberg Finance L.P.
Graphs: Used with permission of Bloomberg Finance L.P.
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