According to European Central Bank (ECB) Vice President Luis de Guindos, US tariffs will put pressure on economic growth and the cost of goods and services in the eurozone for years to come. However, the risk of an excessive inflation slowdown is low, and even a sharp rise in the euro against the dollar does not raise serious concerns.
De Guindos noted that consumer price growth in the region will return to the target level of 2% after falling to 1.4% in the first quarter of 2026. This will occur due to the tight labor market and trade union demands for higher wages.
De Guindos did not explicitly state the need for a pause in the ECB's monetary policy easing. However, he acknowledged that investors anticipating another interest rate cut by year-end had correctly interpreted President Christine Lagarde's statements. Earlier, the regulator's head said the current borrowing costs in the region are "in a good position".
Meanwhile, the strengthening of the euro could put pressure on exporters and lower import prices, de Guindos noted. At the same time, he assured that the currency's exchange rate is stable and is increasing slowly, which reduces the associated inflation risks.