The European Central Bank (ECB) has warned that due to the market volatility and uncertainty caused by U.S. trade tariff policies, investors are reassessing the risks associated with U.S. assets, which may lead to a fundamental change in the global financial market. ECB Vice President Luis de Guindos stated that "uncertainty" has become the dominant reality of the current financial market.

In the latest Financial Stability Assessment Report released by the ECB, it noted that the market is highly sensitive to the continuously updated tariff policies between the U.S. and its trading partners. For instance, when President Trump announced comprehensive reciprocal tariffs, global stock markets fell sharply; however, following his announcement to delay the implementation of tariffs for 90 days, major indices quickly rebounded.

During this turbulent period, although some unusual phenomena were observed, such as the movement of funds away from traditional safe assets like U.S. Treasuries and the dollar, the operations of the Eurozone financial markets remained robust. The ECB stated that while this may relate to technical factors, it could also reflect the latest views of investors, who appear to be reassessing the risk level of U.S. assets, potentially leading to more widespread changes in global capital flows.

On Wednesday (21st), De Guindos told CNBC that the market may face correction risks in the future. He highlighted two major concerns that investors need to pay special attention to: "overvalued assets" and "high uncertainty in the market." He explained that the market is optimistically believing that under the current circumstances, economic growth will slow but not fall into recession, inflation will decrease, and monetary policy will loosen accordingly. However, these expectations may be overly idealistic.

From a macro perspective, the "uncertainty" associated with U.S. trade, fiscal, and regulatory policies has now become the "dominant reality" of the entire financial market and global economy. The current question is what this uncertainty and any possible policy trends mean for the financial stability of Europe and the Eurozone.

He analyzed that tariffs are "harmful rather than beneficial" to economic growth, but their impact on prices is more complex. In the short term, tariffs will raise the prices of imported goods while suppressing consumer demand, and the two effects may offset each other. However, in the long run, if tariffs and trade barriers disrupt global supply chains, business costs will rise, potentially leading to inflation.

Notably, according to the latest economic forecast released by the EU this week, the GDP estimate for the EU for 2025 has been revised down from the original 1.5% to 1.1%, while the Eurozone went from 1.3% to 0.9%. The overall inflation rate is expected to continue to cool and fall below the ECB's inflation target of 2% by 2026, reflecting a trend of synchronized easing in economic growth momentum and price pressures.