Closing summary
Donald Trump appears to have been paying unusually close attention to the European Central Bank’s monetary policy: his first public action this morning was to use their example to attack US Federal Reserve chair Jerome Powell for not cutting interest rates.
The end of Jerome Powell’s tenure as chair “cannot come fast enough”, Trump said. “Too Late should have lowered Interest Rates, like the ECB, long ago, but he should certainly lower them now.”
Trump is perhaps not very likely to have listened to the ECB’s president, Christine Lagarde, explaining the reasons why it has – unlike the Fed – cut interest rates.
Lagarde said on Thursday that “the economic outlook is clouded by exceptional uncertainty” because of Trump’s tariffs, which constitute a negative demand shock.
Lagarde was speaking after cutting the ECB’s main deposit rate by 25 basis points to 2.25% – the seventh reduction within the last year – partly in response to the tariff turmoil.
The ECB president underlined the uncertainty facing forecasters during Trump’s trade war. However, the head of the International Monetary Fund on Thursday said that it has so far predicted the world will avoid a Trump-induced recession, although it will still suffer much slower growth.
Kristalina Georgieva said economic “resilience is being tested again – by the reboot of the global trading system”.
Trade tensions are like a pot that was bubbling for a long time and is now boiling over. To a large extent, what we see is the result of an erosion of trust – trust in the international system, and trust between countries.
You can continue to follow our live coverage from around the world:
In the US, an IRS decision on Harvard’s tax-exempt status is expected soon amid concern over Trump interference
In UK politics, Kemi Badenoch calls for broader review of equality and gender recognition laws
In our Europe coverage, Emmanuel Macron meets Marco Rubio and Steve Witkoff for talks on Ukraine
That’s all from the business live blog this week. Thanks for reading, and happy Easter. JJ
Updated
IMF: Trade tensions will lead to slower economic growth amid Trump tariffs
The International Monetary Fund (IMF) has said that it expects much slower global growth – but not a recession – because of trade tensions amid Donald Trump’s tariff war.
Kristalina Georgieva, the IMF’s managing director, said that the latest world economic outlook forecasts will include “notable markdowns, but not recession”, in a speech in Washington before its annual meeting starting on Monday.
The forecasts will be closely scrutinised for judgments of Trump’s economic policy, after a fortnight of financial market chaos since his “liberation day” tariffs. Stock markets plunged after Trump raised tariffs on all goods imports, only to recover somewhat when he imposed a 90-day “pause” when turbulence spread to the bond market.
The deep uncertainty over Trump’s plans have made it difficult for economists. However, unlike European Central Bank president Christine Lagarde, who refused to say how tariffs would affect inflation, Georgieva said that the IMF has raised inflation forecasts for some countries.
Georgieva said economic “resilience is being tested again – by the reboot of the global trading system”.
Trade tensions are like a pot that was bubbling for a long time and is now boiling over. To a large extent, what we see is the result of an erosion of trust – trust in the international system, and trust between countries.
