Trump fees return central banks to the Corona atmosphere

The widespread customs war war waged by US President Donald Trump to the opponents of the United States and its allies alike, the calculations of central banks around the world, to be controlled by the most severe state of certainty than the one that witnessed during the Korona virus pandemic about five years ago.

The European Central Bank Vice President, Louis de Gindus, told the Sunday Times that Trump’s policies cause a state of uncertainty in the economy greater than it was during the Kofid’s pandem He added: “What we see is that the new American administration is not greatly prepared to continue in multilateral work, which is related to cooperation across all regions and finding common solutions to common problems … This is a very important change and a great source of uncertainty.”

In the past few days, a number of policy makers at the European Central Bank have expressed concern about the impact of a trade war looming on the horizon. Bank President Christine Lagarde said that the escalation of disputes over commercial fees may have a harmful impact on the global economy.

Likewise, the governor of the Spanish central bank, Jose Luis Isa, told Bloomberg TV last Friday that inflation and economic growth assumptions face significant risks in all directions, adding that this situation of foggy makes it impossible to predict more moves in terms of interest rates.

The euro area is expected to achieve only 0.9% this year, according to European Central Bank estimates, previously March. “The real wages have risen, inflation slows down, and the interest rates decrease, and the conditions of financing are better … but despite that, consumption does not actually improve … this is because consumers do not always interact with developments in their personal income in the short term … they also think about what may happen to the economy in the medium term, which is what the ambiguity is surrounded. The scope has an effect on consumer confidence. “

In response to a question about the huge defensive spending plans for European governments, Gindos said: “This is definitely a decision in the right direction,” although it is too early to extract any specific economic results. However, “it is likely to be positive for growth and has a limited effect of inflation,” he said.

The statements of the European Central Bank official come at a time when the anticipation controls many central banks around the world during this week, in their first collective evaluation of the influence of Trump’s commercial policies in the global economy. While officials, from Washington to London and Tokyo, have already made a decision for one time regarding borrowing costs since the US President took office last January, these decisions preceded the remarkable escalation in his speech and actions against his neighbors, allies and competitors alike.

With the application of international customs duties on steel and aluminum, and with the increasing suffering of Canada, China and the European Union from Trump attacks, the threats that were inflicted on a few weeks ago have now been caused to constitute great obstacles to trade. While central bank governors are striving to assess whether the effect will be greater on growth or inflation, they may choose reluctance to take any action at the present time.

The new concerns about a possible American stagnation, which ravaged the Wall Street market last week, will not push the Federal Reserve to provide more monetary facilitation at the present time. Also, keeping interest rates unchanged is the most weighting result in the meetings of Japan, the United Kingdom and Sweden. South African, Russia and Indonesia officials may follow their example, according to a Bloomberg report.

However, some other banks are likely to take immediate measures to face urgent risks, with a cautious assessment of the repercussions of Trump’s actions. In Brazil, for example, the central bank is widely expected to raise borrowing costs again to combat accelerated inflation. In all, those responsible for half of the ten most traded currencies in the world, along with their counterparts in the G20, are preparing to determine interest rates in the coming days.

Last Wednesday, the President of the European Central Bank spoke about the challenge facing many of its global counterparts. With its institution recently refraining from giving a signal about its next step, in anticipation of circumstances, it said that the task of identifying monetary policy is now more difficult. She added that “the level of uncertainty we face is very high, and the preservation of stability in this new era will be an arduous task.”

Amid expectations that federal reserve officials keep interest rates unchanged next Wednesday, at the end of their two -day meeting, the market will focus on the updated economic expectations of officials and press conference of bank President Jerome Powell, in search of signals on the future path.