Bri: It is crucial to ensure the independence of central banks. Tariffs impact on GDP will be significant
Tariffs that 'shake financial markets and threaten to reshape the global economic landscape' come 'in a world already struggling with economic fragmentation, falling productivity', high public debt and the growing weight of 'less regulated non-bank financial institutions'
2' min read
2' min read
"It is crucial to ensure the independence of central banks, which must be able to act without political interference in order to fulfil their mission." This was stated by the Bank for International Settlements (BoI), which released its annual report today, at a time when US President Donald Trump's criticism of US Federal Reserve (Fed) Chairman Jerome Powell is causing concern.
'A central bank is an institution that must be able to do what it deems necessary,' Bri explains, 'to preserve the financial stability and value of its national currency to ensure the conditions for a healthy, functioning economy.
According to Bri, central banks are facing a complex economic situation, which forces them to make a delicate decision, i.e. to continue lowering interest rates or, on the contrary, to hold them steady. "This decision is particularly difficult," the report points out, "given the lack of clarity about the effects of the tariffs implemented so far and the uncertainty about possible future measures.
And then an alarm sounded by Bri. The global economy 'will feel the impact of the high uncertainty even before the full effect of the tariffs' as companies are delaying investment and households are increasing savings to protect themselves.
"The slowdown has yet to manifest itself in the data," writes the Basel-based institute, "but high uncertainty and falling consumer and business confidence clearly signal a coming deterioration in economic activity", with growth expected to worsen significantly "for several countries".
