ECB's Schnabel Sees No Lasting Decoupling From Fed

ECB's Schnabel Predicts Continued Alignment with Fed Amid Trade Tensions

DUBROVNIK, Croatia (Reuters) -Ongoing trade tensions between the United States and the rest of the world are a shock to the entire global economy, meaning the Federal Reserve's and the European Central Bank's monetary policies are unlikely to diverge for long, ECB board member Isabel Schnabel said on Saturday.

"I expect this trade conflict to play out as a global shock that's working through both lower demand and supply," she told a conference in Croatia.

"We can discuss which of the two effects on inflation is larger because that determines the net effect. But in any case, I would not expect a sustained decoupling (between the ECB and the Fed)," she said.

(Reporting By Francesco CanepaEditing by Tomasz Janowski)