ECB’s Nagel: Core inflation rate is still quite high

• There are still noticeable price pressures, especially in services sector
• Trump’s tariffs may cause German economy to contract
• If tariffs come into effect, it could cost Germany 1% in economic output

And therein lies the dilemma for the ECB heading into next year I guess. The good news is that the disinflation process is still progressing, albeit with a few bumps along the way. All else being equal, the argument for further rate cuts should hold heading into 2025.

This article was written by Justin Low at www.forexlive.com.