The European Central Bank should not rush to cut interest rates because inflation in the euro zone remains high and uncertainty is high, bank member Joachim Nagel said in an interview on Friday.
The ECB has cut interest rates four times since June and is expected to continue doing so over the next six months, after seeing inflation slow from double digits at the end of 2022 to just above its 2% target.
But the German central bank president urged a cautious approach given still-high services inflation and a “high level of uncertainty” – a possible reference to the questions looming over global trade when Donald Trump returns to the White House next week.
“Therefore, we should not rush to undertake anything on the path of normalization of monetary policy,” he said.
However, Nagel said there was nothing wrong with the ECB having discussed a 50 basis point cut at its last meeting in December, adding: “This is part of the process.”
Source: Terra
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