ECB’s Kazaks sees mid-2024 rate cuts, urges caution on early reduction

ECB Governing Council member Martins Kazaks, in an interview overnight, indicated that the most likely period for rate reductions could be around the “middle of next year”, specifically pointing to June or July as probable months.

However, Kazaks expressed caution about reducing rates too soon, stating, “But in the spring at the current moment that’s too early.” He also noted a disparity between his outlook and market expectations, particularly concerning the possibility of an initial rate cut in March, which he views as overly “optimistic”.

Kazaks also noted that interest rates are likely to remain at 4% for a while before any reduction is considered.