ECB Governing Council member Mario Centeno spoke at an event today, advocating for a measured and consistent approach to reducing interest rates. Centeno emphasized the need for a “gradual, steady, and predictable reduction in interest rates” to their neutral level, which he estimated to be “maybe 2% or slightly lower.”
Centeno highlighted that inflation in the Eurozone has slowed significantly and is now converging toward ECB’s 2% target. However, he expressed concern that the risk could shift to undershooting the target as inflationary pressures ease.
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