European Central Bank hawks warn: Trade war may drive up inflation and limit further interest rate cuts.

On Friday local time, Isabelle Schnabel, a member of the Executive Board of the European Central Bank, warned that global trade wars could push up inflation in the euro area, limiting the space for further interest rate cuts. As one of the six members of the ECB's Executive Board, Schnabel has a hawkish policy stance and delivered a speech at Stanford University on Friday. Schnabel stated that the rise of protectionism and the sharp increase in European defense spending mean that policymakers need to "maintain a prudent stance and keep interest rates at current levels."