ECB officials shared varied perspectives on the economic outlook and monetary policy today, following yesterday’s 25bps rate cut. This move was largely anticipated as ECB continues its cautious approach to address both inflation and slowing growth.
ECB Deputy Governor Olli Rehn highlighted the “good reasons” behind the rate cut, amid declining inflation. He also stressed that “current uncertainties further emphasize the dependence on fresh data and analysis” to guide policy decisions.
Bundesbank President Joachim Nagel, another member of the Governing Council, struck a positive tone, stating, “We assume that core inflation will improve, especially with the declining wage trend in the eurozone.” He added that in Germany, “things are moving in the right direction.”
Meanwhile, Bank of France President François Villeroy de Galhau acknowledged the challenges posed by weaker-than-expected activity data, particularly in France. However, he maintained a cautious outlook, noting the potential for “a very gradual recovery” beyond the short-term boost from the Olympics. He emphasized that the pace of monetary easing “has to be highly pragmatic” and that ECB “keeps full optionality” for future meetings.
Bank of Slovenia President Bostjan Vasle reiterated ECB’s data-dependent approach, adding that “we are not committed to any predetermined rate path,” with inflation still largely driven by core components and services.
Bank of Estonia Governor Madis Muller, echoing these views, expressed concerns over services inflation but noted growing confidence in the broader inflation outlook, despite expectations of a temporary acceleration.
