ECB policymaker Kazaks says attack on Fed raises new risks to economic outlook

ECB policymaker Kazaks has highlighted the economic risks stemming from the US administration's ongoing attack on the Federal Reserve. He emphasizes that the ECB should be alert, as this attack resembles 'emerging market politics' and adds to the list of risks clouding the ECB's outlook, which includes AI-driven valuations and China's aggressive trade policies. Kazaks warns that risks to inflation and growth are present on both sides, urging caution. If the independence of the Fed is threatened, lower-income US consumers could suffer more due to higher inflation, necessitating increased interest rates to address the situation. Regarding the ECB, he notes that current interest rates are 'appropriate' and that inflation offers 'good news,' as core prices inch closer to the 2% target. Nonetheless, the ECB appears to be waiting for more significant economic signals before making any policy changes, indicating a stance of holding monetary policy steady in the near term.