Concerns over Trump's tariffs! Although traders still expect a high probability of interest rate cuts, more ECB officials are considering holding steady in April

According to sources familiar with the matter, despite the market generally betting that the European Central Bank (ECB) will cut interest rates next month, several ECB officials remain uncertain about whether to lower rates at the next meeting. Analysts believe this indicates that the policy direction of this meeting is much more open than investors expect.

Sources told Bloomberg News that decision-makers from both hawkish and dovish positions are considering holding steady at the meeting on April 17, due to the high uncertainty surrounding U.S. President Trump's trade policies and the surge in European military spending.

Following this news, traders reduced their bets on the extent of the ECB's rate cuts this year, and German bonds subsequently gave back gains. The market's expectation of a 25 basis point cut in April dropped from 85% to 65%. Traders have lowered their bets on the ECB's rate cut prospects, anticipating a reduction space of 58 basis points by 2025.

Currently, dovish officials still believe it is necessary to further ease policy, but if hawkish officials want more time to assess data, they may not insist on the seventh rate cut since last June. Sources emphasized to the media that there are still two and a half weeks until the meeting, and the situation may change.

An ECB spokesperson declined to comment on the April decision, stating that the ECB will continue to adhere to the "meeting-by-meeting assessment" approach.

Against the backdrop of inflation close to the 2% target and sluggish economic growth in the Eurozone, the ECB has lowered the deposit rate from 4% to 2.5%. However, after a relatively smooth policy path, the views among the 26 members of the governing council have begun to diverge.

Trump previously announced tariffs on imported cars, and the lower-than-expected inflation in France and Spain has prompted investors to increase their bets on the ECB's easing policies. The European Union's statistics office will release the preliminary estimate of overall Eurozone inflation on Tuesday, with economists surveyed by Bloomberg expecting the figure to fall to 2.2%.

Analysts believe that the most significant short-term uncertainty currently comes from U.S. tariffs, with Trump set to announce more measures this week. Although ECB officials generally agree that these tariffs will impact economic growth, they still have differing views on whether these tariffs will push up prices