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    ‘Very concerned’ about Europe’s struggling economy, European Central Bank policymaker Centeno says

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    “I am very concerned about the European economy,” European Central Bank policymaker Mário Centeno told CNBC’s “Squawk Box Europe” on Friday.
    The ECB on Thursday took down its gross domestic product expectations for the euro area.
    Potential tariffs from the U.S. could weigh on Europe’s economy, while increased defense spending in the region could have a positive impact.

    Europe’s struggling economy has economists worried — and senior European Central Bank policymaker Mário Centeno, echoes that view.
    “I am very concerned about the European economy,” Centeno, who is also governor of the Bank of Portugal, told CNBC’s “Squawk Box Europe” on Friday.

    On Thursday, the ECB revised its gross domestic product expectations for the euro area to 0.9% growth in 2025, down from a previously projected 1.1% expansion. The euro area’s seasonally adjusted GDP most recently eked out a 0.1% increase in the fourth quarter.
    Centeno linked the downward growth outlook revision to reduced exports and investments, echoing the ECB statement.
    “Special investment is, I think, quite subdued in Europe. It will take four years for us to go back to the 2023 level of investment in the private sector, six years in terms of housing investment [and we will be] going back to 2022 levels only in 2028,” he explained.
    “These are numbers that raise some questions about the recovery in Europe,” Centeno added.
    Concerns about Europe’s sluggish economy have accelerated in recent months, following repeated threats of tariffs from the U.S. administration. U.S. President Donald Trump has already introduced duties on imports from several key U.S. trading partners and has indicated that Europe could be the next target.

    But there is frequent policy movement in the U.S.’ position, with pauses, delays and exemptions aplenty as negotiations and pledges of reciprocal measures from the targeted countries continue.
    “Tariffs are a tax. They are a tax on both consumption and production, and we do know that taxes have a very clear impact on the economy,” Centeno said Friday, warning that ultimately no one would gain from a tariff war.
    One bright spot ahead for Europe could be a potential defense spending push from the European Union, which was introduced earlier this week off the back of souring relations between the U.S. and Ukraine.
    If such packages are “well designed,” they could have a positive impact on Europe’s economy, Centeno said.
    Germany also this week announced plans to boost infrastructure and defense spending, although the proposal must first pass some hurdles before it can be implemented.

    Further rate cuts ahead?

    Centeno also addressed the outlook for ECB interest rates, signaling further trims were expected ahead.
    “We do think that the journey is very clear, although these rate cuts [were] implemented because the European economy is stagnated, we do have in our baseline a projection of inflation going to 2% in the medium term, but that that includes further adjustment in the rates,” he said.
    However, the central bank needed to remain “open” and follow a data dependent, meeting-by-meeting approach, especially due to the current uncertainty regarding economic policies, Centeno said.
    The ECB on Thursday announced its sixth interest rate cut since June last year, taking its key rate, the deposit facility rate, another quarter point lower to 2.5%. The move had been widely expected by markets.
    In a statement announcing the decision, the ECB also tweaked the language it used to characterize monetary policy to say it was now “meaningfully less restrictive,” a change from the previous description of “restrictive.”
    Interpretations of what this could imply for the rate path ahead diverged, with some analysts and economists saying it suggested that policymakers were becoming more cautious about cutting rates. Others said the central bank’s statement indicated more cuts ahead, but that a pause in the cutting cycle could now be on the horizon.
    Markets were last pricing in an around 57% chance of the ECB holding rates steady during its April monetary policy meeting and a 43% probability of a further quarter-point reduction.
    Beyond the ECB’s statement, markets are likely to also be taking into account developments around tariffs and European defense spending in their assessment of what could come next from the ECB.
    “The decision in April will take on board all the information we will get until then,” the central bank’s Centeno commented. More

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    FirstFT: Trump and crypto

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    This article is an on-site version of our FirstFT newsletter. Subscribers can sign up to our Asia, Europe/Africa or Americas edition to get the newsletter delivered every weekday morning. Explore all of our newsletters hereGood morning. As executives prepare to gather at the White House today for a cryptocurrency summit, we look at Donald Trump’s controversial memecoin scheme. We’re also covering: A fresh push for peace in UkraineThe hidden dangers of family offices And Tim Harford pays tribute to economist Donald ‘Shoup Dogg’ Donald Trump’s crypto project made at least $350mn, according to Financial Times calculations, a windfall that is likely to fuel concerns over conflicts of interest arising from the launch of the $TRUMP token.In addition to the $350mn earned through selling the token directly on the Solana blockchain — the digital ledger that underpins most memecoins — more money is likely to have been made from a smaller number of tokens that were distributed for sale on cryptocurrency exchanges such as Binance, experts say. Trump has faced a fierce backlash since he and his wife Melania launched memecoins, tokens with no practical use whose value is entirely based on speculation, just days before his return to the White House.The value of $TRUMP soared to $75 shortly after its launch before plunging to its current value of a little over $13 a coin. However, the FT analysis shows the first 100mn tokens were sold before the price reached $1.05. The stock of 831mn $TRUMP coins held by Trump-linked accounts has a current notional value of $10.8bn.Trump, who has positioned himself as a pro-crypto president, will host many of the industry’s leading executives and investors at the White House later today. The meeting marks a dramatic change of fortunes for the industry which, under the Biden administration, had seen some of its leading protagonists jailed or fined.On the eve of today’s meeting, Trump signed a long-awaited executive order creating a strategic Bitcoin reserve and an additional stockpile of other digital assets. But the government indicated it would not use taxpayer money to fund the reserve, prompting falls for Bitcoin and other digital currencies. Read more on how the FT calculated the earnings of Trump’s memecoin project.Here’s what else we’re keeping tabs on today and over the weekend:Markets: The S&P 500 is on course for its worst week since September after falling another 1.8 per cent yesterday. The tech-heavy Nasdaq Composite fell 2.6 per cent. Central banks: Federal Reserve chair Jay Powell speaks at a monetary policy conference in New York. European Central Bank president Christine Lagarde gives the keynote speech at the ECB’s International Women’s Day conference in Frankfurt. Economic data: The US government publishes monthly employment data for February. Brazil and the EU issue fourth-quarter GDP estimates. Canada: On Sunday, the Liberal party chooses its successor to Justin Trudeau who will also become the country’s next prime minister.How well did you keep up with the news this week? Take our quiz.Five more top stories1. Donald Trump’s administration has backtracked further from its threat to impose sweeping 25 per cent tariffs on Mexico and Canada, in a major climbdown from its aggressive trade agenda, capping a tumultuous week that has roiled markets and frayed diplomatic relations between Washington and its largest trading partners. More on the US president’s executive order.‘It’s like a whipsaw’: Dizzying policy changes have sparked an equity market sell-off, concern from businesses and panic in foreign capitals.2. Ukraine is to begin negotiations with the US next week in Saudi Arabia over ending the war set off by Russia’s 2022 invasion, after days of tension between Kyiv and Washington. Donald Trump’s special envoy, Steve Witkoff, said the meeting with Ukraine would seek to agree a framework for “a peace agreement and an initial ceasefire”. 3. SpaceX’s massive Starship rocket exploded eight minutes after launch in another setback for Elon Musk’s company as it seeks to build a vessel capable of reaching Mars. SpaceX said the vehicle experienced a “rapid unscheduled disassembly”. Stephen Morris and Rafe Uddin have more. 4. Walgreens Boots Alliance has struck a deal worth up to $23.7bn with private equity group Sycamore Partners that will bring the struggling pharmacy chain’s 97-year run as a public company to an end. Walgreens’ market value peaked at more than $100bn soon after the 2014 merger closed, but has since dwindled. Read more on what Sycamore plans to do with the business.5. Parents having fewer children are buying more expensive baby food, according to the head of Nestlé’s nutrition business, as the world’s largest food company shifts its strategy to offset the impact of falling birth rates. The Swiss group said that smaller families had driven “premiumisation”.Today’s big read© FT montage/DreamstimePrivate wealth management companies for the super-rich now manage trillions of dollars globally and are one of the fastest growing areas of finance. They are also one of the least under­stood — or reg­u­lated. Read more on the hidden dangers of family offices.We’re also reading . . . Mar-a-Lago accord: The idea of a new Plaza Accord to weaken the dollar is sparking endless gossip among financiers, writes Gillian Tett.Venezuela: Opposition leader María Corina Machado welcomed the Trump administration’s abrupt decision to stop Chevron drilling in her country.Syria’s new leader: Is Ahmed al-Sharaa a conquering hero with intentions of moderating or a brutal strongman with a flair for PR? Chart of the daySoaring property values in Dubai are underpinned by a robust economy which benefited from the city’s decision to open up to visitors during the pandemic while other hubs still restricted travel. The UAE also liberalised its visa system in 2022. But some question how long the meteoric price rises can continue.Take a break from the news . . . Donald Shoup revolutionised the way urban planners thought about parking. How he did it should be an example to economists everywhere, writes Tim Harford. His genius was to take a problem that seemed boring and trivial and show that it was neither.© Guillem CasasúsThank you for reading and remember you can add FirstFT to myFT. You can also elect to receive a FirstFT push notification every morning on the app. Send your recommendations and feedback to firstft@ft.comRecommended newsletters for youOne Must-Read — Remarkable journalism you won’t want to miss. Sign up hereNewswrap — Our business and economics round-up. Sign up here More

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    Trump’s Policies Have Shaken a Once-Solid Economic Outlook

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    Economic forecasts have deteriorated in recent weeks, reflecting the upheaval from federal layoffs, tariff moves and immigration roundups.President Trump inherited an economy that was, by most conventional measures, firing on all cylinders. Wages, consumer spending and corporate profits were rising. Unemployment was low. The inflation rate, though higher than normal, was falling.Just weeks into Mr. Trump’s term, the outlook is gloomier. Measures of business and consumer confidence have plunged. The stock market has been on a roller-coaster ride. Layoffs are picking up, according to some data. And forecasters are cutting their estimates for economic growth this year, with some even predicting that the U.S. gross domestic product could shrink in the first quarter.Some commentators have gone further, arguing that the economy could be headed for a recession, a sharp rebound in inflation or even the dreaded combination of the two, “stagflation.” Most economists consider that unlikely, saying growth is more likely to slow than to give way to a decline.Still, the sudden deterioration in the outlook is striking, especially because it is almost entirely a result of Mr. Trump’s policies and the resulting uncertainty. Tariffs, and the inevitable retaliation from trading partners, will increase prices and slow down growth. Federal job cuts will push up unemployment, and could lead government employees and contractors to pull back on spending while they wait to learn their fate. Deportations could drive up costs for industries like construction and hospitality that depend on immigrant labor.“If the economy was starting out in quite good shape, it’s probably in less good shape after what we’ve seen the last few weeks,” said Donald Rissmiller, chief economist at Strategas, a research firm.A Strong FoundationThe U.S. economy has repeatedly shown its resilience in recent years, and there are parts of Mr. Trump’s agenda that could foster growth. Business groups have responded enthusiastically to Republican plans to cut taxes and reduce regulation. A streamlined government could, in theory, make the overall economy more productive.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Fired Federal Workers Face a Sluggish Job Market

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    Unemployment is low, but there isn’t much room to move around — especially for those with highly government-specific skills.For about a year now, the labor market has existed in a state of eerie calm: Not many people were losing their jobs or quitting, but not many of those seeking work were getting job offers.The mass layoffs now underway across the federal government, along with its employees who are voluntarily heading for the exits, could disrupt that uneasy equilibrium.While unemployment is relatively low at 4 percent, those losing their positions could face a difficult time finding work, depending on how well their skills translate to a private sector that does not seem eager to hire.“Federal workers all across the country are starting to look, and it’s impacting people everywhere,” said Cory Stahle, an economist at the job search platform Indeed. “It’s hard to think this isn’t going to stress test the labor market in the coming months.”On the eve of the Trump administration, the federal government’s executive branch employed about 2.3 million civilians. It’s not clear how many of those will end up being cut, and how many will get their jobs back after lawsuits over those terminations work through the courts.But impact of the pace at which government spending is being slashed, along with instructions from the White House budget office for agencies to slice even deeper, could be meaningful.Are you a federal worker? We want to hear from you.The Times would like to hear about your experience as a federal worker under the second Trump administration. We may reach out about your submission, but we will not publish any part of your response without contacting you first.

    We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Trump’s Tariffs by Whim Keep Allies and Markets Off Balance

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    On Tuesday, Commerce Secretary Howard Lutnick went on Fox Business to reassure nervous allies and even more twitchy investors that the Trump administration was negotiating a deal to avoid tariffs on goods from Mexico and Canada, and that the president is “gonna work something out with them.”“It’s not going to be a pause” for Mr. Trump’s on-again, off-again tariffs, he insisted. “None of that pause stuff.”On Thursday, the world got what the president characterized as more of that pause stuff.Mr. Trump’s announcement that he had a good conversation with Mexico’s president, and would delay most tariffs until April 2, was only the latest example of the punish-by-whim nature of the second Trump presidency. A few hours after the Mexico announcement, Canada got a break too, even as Mr. Trump on social media accused its departing prime minister, Justin Trudeau, of using “the Tariff problem” to “run again for Prime Minister.”“So much fun to watch!” he wrote.Indeed, it appears that Mr. Trump is having enormous fun turning tariffs on and off like tap water. But others are developing a case of Trump-induced whiplash, not least investors, who sent stock prices down again on Thursday amid the uncertainty over what Mr. Trump’s inconstancy means for the global economy. (A later rise in stock futures pointed to rosier expectations for Friday.)When the White House finally released the text of Mr. Trump’s orders on Thursday evening, it appeared that some of the tariffs — those covered in the U.S.-Mexico-Canada trade agreement that Mr. Trump negotiated and celebrated in his first term — were indeed permanently suspended. Other tariffs were merely paused.Most everyone involved was confused, which may well have been the point.As Mr. Trump hands down tariff determinations and then pulls them back for a month or so, world leaders call to plead their case, a bit like vassal states appealing to a larger power. Chief executives put in calls as well, making it clear that Mr. Trump is the one you need to deal with if you are bringing in car parts from Canada or chips from China.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Trump Suspends Mexico and Canada Tariffs on USMCA Goods for a Month

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    Two days after imposing sweeping tariffs on Canada and Mexico, President Trump on Thursday abruptly suspended many of those levies, sowing confusion with investors and businesses that depend on trade with the countries.The president said he would allow products that are traded under the rules of the U.S.-Mexico-Canada Agreement, the trade pact he signed in his first term, to avoid the stiff 25 percent tariffs he imposed just days ago on two of America’s largest trading partners.The suspension effectively abandons many of the tariffs that Mr. Trump had placed on Canadian and Mexican products — levies he said were necessary to stem the flow of drugs and migrants into the United States.His decision came a day after he said he would grant a 30-day reprieve to automakers, who had complained to the president that the levies would cause severe damage to U.S. carmakers. Mr. Trump implied that any relief would be short-lived, saying that other tariffs on Canadian and Mexican products are coming in April.Mr. Trump’s chaotic, stop-and-start approach has sent stock markets tumbling and generated anxiety among industries that depend on trade with Canada and Mexico, which account for more than a quarter of U.S. imports and nearly a third of U.S. exports. After Mr. Trump imposed his tariffs, Canada retaliated with levies on $20.5 billion worth of American goods, including agricultural products, and Mexico was threatening to impose its own import taxes on U.S. goods on Sunday if Mr. Trump did not relent.Still, the decision to suspend the tariffs did little to calm financial markets, which have been jittery since Mr. Trump ratcheted up his trade war earlier this week. In addition to hitting Canada and Mexico, Mr. Trump placed a second 10 percent tariff on all Chinese imports, prompting another round of retaliation from Beijing on American products. The president has not suspended any of his levies on China. More

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    Sweeping Tariffs Threaten to Undo a 30-Year Trade Alliance

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    When the United States signed a free-trade agreement with Canada and Mexico more than 30 years ago, the premise was that partnering with two other thriving economies would also benefit America.This week, President Trump abruptly scrapped that idea. He imposed a sweeping 25 percent tariff on Tuesday on the roughly $1 trillion of imports that Mexico and Canada send into the United States each year as part of that North American trade pact — before quickly walking them back. On Thursday, the president signed executive orders suspending the tariffs on Canada and Mexico for goods that trade under the rules of the U.S.-Mexico-Canada Agreement, which is much of the trade that crosses North American borders.If the tariffs had gone into full effect, they would have significantly raised costs for Canadian and Mexican exports, undermining their economies and likely tipping them into recession.Mr. Trump’s flirtation this week with unwinding decades of economic integration raises big questions about the future of North America and the industries that have been built around the idea of an economically integrated continent. While some factories in Canada and Mexico might have moved to the United States to avoid tariffs, the levies would also have raised costs for American consumers and manufacturers that have come to depend on materials from their North American neighbors.“This is a day where the United States stopped seeing trade as force for mutual benefit, and began seeing it as a tool of economic warfare,” said Edward Alden, a senior fellow at the Council on Foreign Relations. He added that the levies were “a fundamental attack on the economic well being of our closest neighbors.”While Mr. Trump suspended his tariffs on Thursday, any relief could be short lived. The president has said that he expects to issue more tariffs on Canada and Mexico next month, when he announces what he is calling “reciprocal” tariff measures.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More