1202 GMT - The latest U.S. tariffs reinforce the likelihood of European Central Bank cuts this year, including in April, according to Goldman Sachs economists. A stronger euro and more aggressive tariffs on China, east Asia and also elsewhere in Europe imply downside risks to inflation, raising the prospect of three more ECB cuts until a 1.75% deposit rate in July, they say in a note. Financial conditions have also tightened since the tariff announcement. "Moreover, strong language by the U.S. administration on foreign retaliation implies greater risk of escalating trade tensions, which could push the euro area into a technical recession in a downside scenario," the say. Goldman's current forecast for eurozone growth is 0.8% 2025, which already assumes a trade-related hit. (edward.frankl@wsj.com)
(END) Dow Jones Newswires
April 04, 2025 08:02 ET (12:02 GMT)
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