MNI BRIEF: Tariff Inflation Impact Balances Out -ECB's Guindos

U.S. tariffs and potential retaliation in Europe would boost inflation in the short term but this would be balanced in the medium term by a hit to economic growth, European Central Bank Executive Board member Luis de Guindos said on Friday.

De Guindos was confident in that the ECB is on its way to reaching its 2% inflation target, but stressed that it should remain cautious regarding future movements due to the great level of uncertainty. (See MNI SOURCES: ECB Still Set For 2% Deposit Rate As Yields Surge)

“There are many elements that can distort the projections. The fundamental element is what is going on with trade policy,” he said at an event in Spain.

The lower degree of monetary restriction is already being felt, he said, pointing to data from credit and lending surveys.