ECB Board Member Villeroy de Galhau: Trump tariffs harm global economy, Europe still has room to lower interest rates

Franois Villeroy de Galhau, member of the European Central Bank governing council and Governor of the Bank of France, stated on Monday that the tariff threats by US President Donald Trump have brought uncertainty to the global economy, but with the inflation rate in the Eurozone decreasing, Europe still has room for further interest rate cuts. Villeroy de Galhau said, "We are in a very uncertain moment... Trump's policies are not working. The policies of the Trump administration are harming the US economy, unfortunately, they are also harming the world economy." Villeroy de Galhau mentioned that some economists even predict an economic recession in the US, and added, "Protectionism is not a solution; it means slower growth and worsening inflation." Villeroy de Galhau reiterated that with inflation continuing to decrease, he believes there is no risk of an economic recession in France or Europe. He said, "We still have room for gradual interest rate cuts." Sources revealed last week that as inflation continues to decline, European Central Bank policymakers are increasingly confident about an interest rate cut in June, but they are not willing to take substantial measures for a sharp interest rate cut. Earlier this month, the European Central Bank lowered the benchmark interest rate to 2.25%.