Three Governing Council members believe it may be too early to consider cutting interest rates in March or April.
The ECB’s rate cut should only take effect as inflation stabilizes below 3%, according to an analysis by three ECB Council members who on Monday contradicted expectations for an ECB cut in 2024.
Yiannis Stournaras, member of the ECB Council and Governor of the Greek Central Bank, stressed that the ECB should only ease monetary policy if inflation remains below 3%, meaning that expectations for the start of interest rate cuts in March will depend on this stability.
Peter Casimir publicly stated that cutting interest rates too late would be riskier than keeping interest rates high for too long, while Bostjan Vasli (Slovenia) stressed that the ECB would have to wait until at least spring in order to reassess its monetary policies. Policy. Therefore, officials believe that it may be too early to consider cutting interest rates in March or April.
Today the European Central Bank decided to keep interest rates unchanged, as expected by the markets. The European Central Bank justified its decision by the risk that inflation may rise temporarily in the near term. Expectations indicate a gradual decline in 2024, reaching 2% in 2025
A Reuters poll of 90 economists concluded that the bank will keep interest rates unchanged at today’s meeting. According to the survey, interest rates will be reduced only from the second quarter of next year.
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