ECB’s de Guindos: Markets Never in Panic Mode After April 2, Liquidity Always Present

8 April 2025

By Marta Vilar – MADRID (Econostream) – European Central Bank Vice President Luis de Guindos said on Tuesday that markets tended to overreact to news in the short term and that the decline seen after the recent US tariff announcement did not suggest that markets were entering panic mode.

In a speech at the Spanish Bankers Association in Madrid, de Guindos said that in the last few days ‘liquidity has always been there, there was no panic situation on the markets and that’s something we look at very closely.’

The ECB’s prudent meeting-by-meeting, data-dependent approach had proven to be the right one in this context of high uncertainty with regard to the US administration’s announcements, he said.

Before the announcement on April 2, the average tariff for the US was at 2%, he said, and it would now be around 25% if the announcements materialised.

‘That is higher than what was expected’, he said.

A second round of tariffs would lead to a full-blown trade war and that would be ‘the worst-case scenario for the global economy’, he said.

‘Markets always overreact in the short term’, he said. ‘We have to look at things with perspective.’

De Guindos described himself as ‘optimistic’ and said this had served as a wake-up call for Europe.