The world’s three most watched central banks are staring at the same tariff‑darkened horizon and choosing different roads. In Washington, Chair Jerome Powell insists the Fed can afford to wait, holding rates at 4.25‑4.50 percent while it studies whether inflation stirred by White House import taxes will stick or fade. In Frankfurt, Christine Lagarde’s ECB has already pressed the brake seven times, slicing its deposit rate to 2.25 percent on a promise to move “meeting by meeting” until euro‑zone prices cool and growth stirs. Across the Thames, Andrew Bailey’s Bank of England hovers between them, preaching caution even as traders wager on a May cut to shelter Britain from shrinking trade flows.
Behind the speeches lie deeper tensions: political pressure that tests the Fed’s independence, fiscal headaches as central‑bank balance sheets bleed interest, and an uneasy recognition that tariffs now set the tempo for monetary music. If trade warriors keep turning the dial, rate‑setters may find their own instruments out of tune. The next pivot could be forced not by spreadsheets, but by the fear of watching credibility erode in real time. Households from Atlanta to Athens will hear the echo in borrowing costs before policymakers admit the melody changed.
