ECB’s Lane: Alternative Scenarios on Tariffs to Be Included in June Projections

16 May 2025

By Marta Vilar – MADRID (Econostream) – European Central Bank Chief Economist Philip Lane said on Friday that the ECB would include alternative scenarios about US tariff policies in its June forecasts.

In a speech at the Second Thomas Laubach Research Conference in Washington, Lane said that ‘the ongoing uncertainty about US tariff policies means that alternative scenarios will also be included in the June macroeconomic projections exercise.’

Lane questioned the benefits of publishing a conditional assessment of the most likely future rate path.

‘Putting aside the logistical challenge of forming a consensus on the conditional future rate path among the 26 members of the Governing Council, it is my view that such an exercise would create unwarranted expectations about the future rate path’, he said.

Despite rate path simulations being ‘highly valuable’ for internal purposes, it was better to stick to a meeting-by-meeting approach and keep communication only about the immediate decision, he said.

With respect to the communication about the reaction function, Lane said that it ‘should be periodically updated in line with the evolving risk environment: there is unlikely to be a fixed, timeless list of risk proxies.’

Releasing a number of ‘curated alternative scenarios’ after every meeting would be too demanding for a 26-member Governing Council, he said.