Dutch central bank President uncertain about ECB rate cut prospects due to trade tensions

According to President of the Dutch Central Bank (De Nederlandsche Bank) Klaas Knot, the prospects for further interest rate cuts in Europe remain in doubt due to escalating global trade tensions and the need to increase defense spending. These factors make it difficult to predict inflationary trends in the region, the official said.

Knot, who is also one of the European Central Bank (ECB) executives, said he is prepared to consider all options at the upcoming monetary policy meeting in April.

The ECB has already cut interest rates six times since last June, though no signals of further course of action have been given.

As Knot believes, the situation remains too uncertain for now. He admits that the implementation of US tariffs and retaliatory measures on the EU side could lead to higher inflation. Knot also warned that economic growth is likely to weaken due to market volatility. This, in turn, could put downward pressure on inflation.

The multidirectional factors complicate the decision-making process of the ECB. The central bank is cautious, closely monitoring economic data before deciding on its monetary policy, the official emphasizes.