Eurozone Inflation Falls Amid U.S. Tariff Threat

Eurozone inflation fell to 2.2% in March, nearing the European Central Bank's (ECB) 2% target and marking the second consecutive month of decline, as manufacturing output showed signs of recovery. This economic progress is threatened by impending U.S. tariffs, which could disrupt trade and potentially reignite inflationary pressures. The ECB is contemplating its next move, with many investors anticipating a further interest rate cut at the upcoming meeting, although some policymakers advise caution due to market uncertainties. Meanwhile, Germany's inflation also dipped to 2.2% in March, driven by falling energy costs and slowing service price increases. Core inflation in Germany, excluding food and energy, also decreased, providing the ECB with potential flexibility to adjust monetary policy. However, the threat of U.S. tariffs looms large, potentially complicating the ECB's efforts to maintain price stability.