The ECB has indicated that the current economic changes may represent a significant and potentially permanent shift in global economic, financial, and diplomatic interactions.

Inflation expectations among euro zone consumers rose in March 2025, reaching 2.9% for the next 12 months, up from 2.6% in February, prior to the U.S. imposing tariffs that ignited a global trade war.

Additionally, expectations for inflation three years ahead increased slightly to 2.5% from 2.4%, according to a survey conducted by the European Central Bank (ECB) involving 19,000 consumers across 11 euro zone nations.

Despite these rising expectations, the ECB expressed concerns that the new economic landscape, shaped by U.S. tariffs, could lead to lower price growth due to a stronger euro, declining energy prices, and anticipated weaker economic growth.

There are also fears that China might respond to reduced access to the U.S. market by flooding Europe with cheap goods, which could further depress inflation rates in the euro zone.

In light of the shifting economic outlook, the ECB cut interest rates in April 2025, highlighting worries over weak growth and the risk of not achieving its 2% inflation target.