Long shadow of the Fed shows limits of ECB talk of independence

For ECB officials gathering next week to discuss when to dial back their monetary tightening, that means keeping a close eye on the US — even as they stress they’ll chart their own path

Policymakers led by President Christine Lagarde have started to prepare markets for an initial cut on June 6 as price pressures ease rapidly. Photographer: Hannelore Foerster/Bloomberg via Getty Images 

The European Central Bank insists it won’t take any cues from the Federal Reserve on when to start cutting interest rates — but its subsequent policy path may well be shaped by what happens in the US all the same.

Trends driving the world’s largest economy usually don’t take long to spill into other regions, impacting financing conditions and exchange rates almost immediately — and inflation, trade and other metrics further out. So policymakers elsewhere can’t really escape the Fed’s gravitational pull when assessing the fate of their own economies.