During the World Economic Forum in Davos, ECB Governing Council member Robert Holzmann expressed skepticism about the possibility of rate cuts in the near term. He told CNBC, “I cannot imagine that we’ll talk about cuts yet, because we should not talk about it.”
His asserted, “Everything we have seen in recent weeks points in the opposite direction, so I may even foresee no cut at all this year.”
“Unless we see a clear decline towards 2%, we won’t be able to make any announcement at all when we’re going to cut,” he explained.
Holzmann also highlighted the potential for structural changes in the economy, which could have longer-term implications for pricing. He mentioned, “Prices on a day-to-day basis may increase, but it may also risk to change the way we do business.” This comment points to the possibility of enduring economic shifts that could affect pricing dynamics and, consequently, ECB’s monetary policy decisions.
