Faced with US tariff uncertainty, central banks do this simultaneously

In the context of the US economy being predicted to fall into a state of stagflation due to tariffs, central banks and international organizations have simultaneously warned of the risk of a global economic slowdown.

US tariffs and related uncertainties are pushing the global economy to the brink of recession. Pictured: Containers at the Port of Vancouver in Canada. (Source: Getty Images)

On March 20, the Bank of England (BOE) decided to keep interest rates unchanged, while pointing out that the US's tax move was a factor that dampened the global outlook.

The BOE said that increased geopolitical uncertainties also pushed up its index of global financial market volatility.

Meanwhile, the Bank of Japan (BOJ) issued a similar warning when deciding to keep its interest rate policy unchanged.

Washington's new global tax plan will influence the BOJ's future moves, the BOJ said.

Meanwhile, President of the European Central Bank (ECB) Christine Lagarde emphasized that the US tariff policy and the European Union's (EU) ability to respond could harm growth, causing inflation to increase by 0.5% in the short term.

Stressing that international developments remain the main risk amid growing economic uncertainty, the Swiss National Bank (SNB) also cut interest rates.

Economists also predict that the Canadian and Mexican economies will experience a decline in growth, as both North American countries are heavily dependent on exports to the United States.

The two economies are at the heart of President Donald Trump's trade policy.

In addition, changes in global currency and capital flows and adjustments in foreign spending by the world's largest economy have contributed to the divergence, with some countries benefiting and others suffering.

"The tariffs and associated uncertainties are pushing the global economy to the brink of recession," said Ken Wattret, global economist at S&P Global Market Intelligence.

Indicators measuring trade policy uncertainty have recently spiked to record highs, while business surveys also show slowing global growth.

Sharing the same view, expert Jeffrey Schultz, head of CEEMEA economics at BNP Paribas Markets 360, said that tariffs will have negative impacts on global economic growth.

Mr. Schultz expressed concern about the possibility of an economic recession and rising inflation in the US - which could cause the US Federal Reserve (Fed) to delay interest rate cuts.

As a result, global financial conditions will tighten, creating an uncertain environment that will be difficult for emerging markets.

Source: https://baoquocte.vn/truoc-bat-on-thue-quan-tu-my-cac-ngan-hang-trung-uong-dong-loat-lam-dieu-nay-308386.html