Reduced inflation forecasts in eurozone bolsters arguments for ECB rate cut

According to a Bloomberg survey, inflation growth in the eurozone is expected to be slower than previously forecasted due to higher US tariffs. This corresponds to the plans of the European Central Bank (ECB) to cut interest rates this week.

Analysts polled by the agency expect the region's consumer price growth rate to reach an average of 1.9% next year and 2% in 2027. Their estimates were cut by 0.1 percentage point for each forecast. They also believe the eurozone economy will grow by 0.8% this year. That's lower than previous estimates. In a separate survey, economists projected two ECB rate cuts in the rest of the year—in April and June.

The latest estimates don't take into account the recent decision of the US administration to hold back on imposing higher tariffs on most countries. Nevertheless, they pinpoint the likely impact of the United States' trade policy tightening on the bloc's economy.

JPMorgan Chase economist Greg Fuzesi said that even with the pause in tariffs implementation, the ECB's April rate cut still makes sense. Further course of events, in his opinion, will depend on the results of negotiations with the United States on trade tariffs.