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ECB’s Nagel: Uncertainty From Recent Tariff Escalation to Have Spillovers on Monetary Policy

21 January 2026

ECB’s Nagel: Uncertainty From Recent Tariff Escalation to Have Spillovers on Monetary Policy
Joachim Nagel, president of the Deutsche Bundesbank, at the ECB International Women’s Day 2025 in Frankfurt on March 7, 2025. Photo by Adrian Petty/ECB under CC BY-NC-ND 2.0.

By Marta Vilar – MADRID (Econostream) – European Central Bank Governing Council member Joachim Nagel said on Wednesday that uncertainty stemming from the recent escalation around US tariffs would have spillovers on monetary policy.

 

In an interview with CNBC on the sidelines of the World Economic Forum in Davos, Switzerland, Nagel, who heads the Deutsche Bundesbank, said that the current situation was “very delicate” because “all these uncertainties regarding the tariff discussion will have some spillovers to monetary policy.”

 

The ECB should take this “uncertain situation” in consideration, he said.

 

Aside from that, Nagel said that monetary policy was “on a good path” and that inflation was “more or less” at the 2% target. The ECB was in neutral territory and the new tariff situation could be a game changer, he said.

 

Tariffs already had some negative impact on economic activity, hitting European GDP by approximately 0.1% so far, he said, adding that escalation on this front would have “negative impact for sure.”

 

As for the impact on inflation, Nagel said that “the whole picture is pretty opaque.” Effects from tariffs were clearer with respect to growth than inflation, he said, noting that he was “more concerned” about the impact on economic activity.

 

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