Christine Lagarde, the head of the European Central Bank, stated on Friday that the bank is prepared to take action if financial stability is threatened by US President Donald Trump’s tariff campaign.
Following discussions with eurozone finance ministers about how Europe can prevent a trade war or safeguard its economy in the event that negotiations to avoid US levies fail, Lagarde declared in Warsaw that the ECB “is always ready to use the instruments that it has available.”
However, we have seen that market infrastructures and market functioning, including the bond markets, are operating in an orderly manner throughout Europe, and the euro area in particular,” Lagarde stated.
Her remarks coincide with European stock markets stumbling in early afternoon trading and the dollar plunging to its lowest level versus the euro in over three years, less than a week before the ECB’s next meeting to deliberate on monetary policy.
The trade war between the United States and China has intensified despite Trump announcing a 90-day halt to his punishing global tariffs. Their battle, which appears to have no end in sight, has unsettled markets, particularly in Asia.
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