My take is that the Trump administration is profoundly serious in trying to change the course of the Federal Reserve. That is a very worrying situation because it would have spillovers for the rest of the world. A politically dependent Fed would lead to more inflation in the United States and to turbulences in the world economy and the financial markets. I truly hope this will not happen. We have already enough turbulences because of geopolitical tensions like the Russian war in Ukraine and trade tensions.

I see this as a significant opportunity for the eurozone to enhance the international role of the euro. The political developments in the US weakens the trust of investors in the dollar. I don’t want to see the dollar collapse. That would be bad for the world economy. But I would not mind sharing some of the extraordinary privileges that come with a global reserve currency, for example lower capital costs.

The exchange rate is not a policy target for the ECB, but it is one factor in the overall equation of our comprehensive assessment of monetary policy. We are monitoring the developments, but they are not driving our decisions.

As we don't do forward guidance now, I would like to refrain from any speculations about future meetings. There is plenty of uncertainty in the air at the moment. That underlines the importance of data dependency and the comprehensive assessment of the incoming data. The European economy has demonstrated more resilience than expected earlier this year. On the other hand, geopolitical tension and trade uncertainty is weighing on the European economy and is damaging growth. Regarding the inflation outlook, for now we are in a good place. Inflation has stabilized around our medium-term target. That is good news but there is no reason for excessive satisfaction. We have several downside risks for inflation including cheaper energy, a stronger euro and tariffs that are dampening growth. We must be mindful about these downside risks.

The so-called trade deal was somehow worse than expected. Another aspect is that there are no retaliation measures by the EU. The inflationary effects for the eurozone are insignificant. The main negative effect for Europe is on growth. The lower economic activity will reduce inflation in the euro area. You can say that the so-called deal somewhat reduces uncertainty in the short term. But more importantly, we must expect that policy uncertainty will remain high for quite some time. The new US policy is less consistent and predictable than the previous ones.

A recession is not our central scenario. Industrial production has shown more resilience to the tariffs than expected. Nonetheless, I would have preferred a more strategic approach by the EU in the negotiations.

A more strategic approach and united front at the beginning of the negotiations would have given the EU a better position. The European Union has also not been as prepared as it would have been possible. Anyway, we have now to live with the deal as it is.

They are always important, also this time. I have already described to you how I see the economic environment in the near future. But this may change to some extent after we get the new projections and the analysis they are based on.

The tariffs are higher than in the baseline scenario from June. So, we expect that there will be more growth reductions going on. Much will depend on how geopolitical and trade tensions develop. And indeed, it is a handicap that consumer confidence is weak in some parts of the eurozone, like in Finland or Germany. The savings rate is high despite the rise of real wage growth. It has not come down as expected.

That is something we indeed need to observe closely. So far, we have not seen major impacts from the fragmentation of the global economy on inflation.

Our weakness is that we don't have a pan-European retail payment system. We are excessively dependent on mainly two American companies, Visa and Mastercard. That is why the private and the public sector should focus on speeding up creating a truly functioning European payment system. Therefore, the ECB is working on the digital euro to become the backbone of that system.

I prefer to discuss this internally and not to comment on things that are completely premature.

The introduction has to be done profoundly well and in a trustworthy and reliable manner. It is better to do it the best way we can instead of doing it by rushing. So it will take some years. By the way, we still lack legislation. We encourage the European Parliament to speed up the process.

There are at least two major advantages. Consumers and entrepreneurs pay quite high fees using credit cards, for instance. The digital euro would be a cost-efficient public good that is free for the citizens of Europe. The second thing is that we have to enhance our cyber resilience. The digital euro would provide one important element of a resilient payment infrastructure.