Bundesbank President Jens Weidmann warned today that trade wars would damage the global economy and are useless in reducing current account deficit. He said “some expect higher tariffs to reduce current account balances… But this hope may prove futile, our analyses suggests.”
Also, Trump’s new tariffs will pose risks to the US economy. And, “retaliatory tariffs of other countries are likely to further weaken the global economy and world trade. Trade wars only know losers.”
Domestically, he admitted that inflation is “stubbornly low”. However, if outlook allows it, there is no need to postpone monetary policy normalization.
