Finance
Handful of ECB policymakers wanted larger cut, worried about tariffs - sources
Published by Global Banking & Finance Review®
Posted on December 12, 2024
2 min readLast updated: January 27, 2026
Global Banking & Finance Review®
Company
Published by Global Banking & Finance Review®
Posted on December 12, 2024
2 min readLast updated: January 27, 2026
Some ECB policymakers sought a larger rate cut due to US tariffs threatening growth. Ultimately, a quarter-point cut was agreed upon.
FRANKFURT (Reuters) - A handful of European Central Bank policymakers initially wanted a larger interest-rate cut on Thursday, worried among other things that new U.S. tariffs would hamper economic growth, three sources told Reuters.
The ECB-POLICY-CENTENO-a52f21b9-8975-4dc5-9a21-8c5e8267aa43>ECB-POLICY-RATES-82f6314e-6203-420b-bc8b-70a978546822>ECB-POLICY-CENTENO-a52f21b9-8975-4dc5-9a21-8c5e8267aa43>ECB cut interest rates by a quarter of a percentage point on Thursday and kept the door open to more easing as the euro area economy is dragged down by political instability at home and the threat of a fresh U.S. trade war.
But around five of the 26 members of the Governing Council initially pushed for a 50-basis-point cut in light of lower inflation and growth forecasts.
They argued, in particular, that economic output could grow by less than the ECB-POLICY-CENTENO-a52f21b9-8975-4dc5-9a21-8c5e8267aa43>ECB-POLICY-RATES-82f6314e-6203-420b-bc8b-70a978546822>ECB-POLICY-CENTENO-a52f21b9-8975-4dc5-9a21-8c5e8267aa43>ECB's already downgraded 1.1% projection next year if Donald Trump's incoming U.S. administration imposed fresh tariffs on the European Union.
The small minority of policymakers clamouring for the bigger cut soon yielded, the sources said, adding there was little appetite for rushing decisions given the prevailing uncertainty.
An ECB-POLICY-CENTENO-a52f21b9-8975-4dc5-9a21-8c5e8267aa43>ECB-POLICY-RATES-82f6314e-6203-420b-bc8b-70a978546822>ECB-POLICY-CENTENO-a52f21b9-8975-4dc5-9a21-8c5e8267aa43>ECB spokesman declined to comment.
ECB-POLICY-CENTENO-a52f21b9-8975-4dc5-9a21-8c5e8267aa43>ECB-POLICY-RATES-82f6314e-6203-420b-bc8b-70a978546822>ECB-POLICY-CENTENO-a52f21b9-8975-4dc5-9a21-8c5e8267aa43>ECB President Christine Lagarde said Thursday's cut was backed by all policymakers and that the staff's new economic projections do not reflect any U.S. tariff that has not already been introduced.
(Reporting By Francesco Canepa and Balazs Koranyi)
The main topic is the European Central Bank's interest rate cut and the internal debate over its size due to US tariff concerns.
They were worried that new US tariffs could hinder economic growth, prompting a call for a larger rate cut.
The ECB decided on a quarter percentage point rate cut, with unanimous backing from policymakers.
Explore more articles in the Finance category
