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ECB indicates interest cuts in June may be "appropriate"

23 MEI 2024
Onderwerpen
Bancos Euribor Taxas de Juro Comprar Casa em Portugal Inflação BCE Despesas Europa
Despite a possible cut in June, the European Central Bank Council will only make a second possible adjustment in the autumn, considering the scenario of uncertainty.
ECB indicates interest cuts in June may be "appropriate"
Fonte: Freepik
Autor: Redação

The interest rate cut may be closer than ever, with the Governing Council of the European Central Bank (ECB) maintaining its position on the revision of rates at its next meeting, which takes place at the beginning of June. However, Isabel Schnabel, a German representative on the ECB’s board of directors, warns that a second cut will only possibly take place in the autumn.

"Depending on the available data and the new projections of Eurosystem officials, an interest cut in June may be appropriate", she said, but warned that "based on current data, an interest cut in July does not seem justified".

Thus, the trajectory of interest review, in addition to that already expected in June, "is much more uncertain" and the latest data reiterate that the final stretch of the disinflation process "is the most difficult", since most of the impacts, on the supply side, were reversed.

Thus, and "given the high uncertainty about the inflation outlook, we should give enough time to assess how the recovery is progressing and how monetary policy affects economic growth and inflation", said the German representative. 

After a series of years in which inflation remained at a high rate, according to Isabel Schnabel, anticipating interest cuts could lead to premature easing: "further advances are needed in inflation and especially in domestic inflation, which is proving more difficult. It is necessary to build confidence that inflation will sustainably return to our 2% target by 2025 at the latest"

Onderwerpen
Bancos Euribor Taxas de Juro Comprar Casa em Portugal Inflação BCE Despesas Europa
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