ECB Governing Council Gediminas Simkus expressed a conditional optimism about rate reductions within the year, stating, “If we don’t see any surprises that would change the data and the thinking, I’m positive about rate cuts this year.”
However, Simkus tempered his outlook with a dose of realism regarding the timing of these cuts. He clarified, “I’m far less optimistic than markets about rate cuts in March or April.”
Separately, another Governing Council member Madis Müller commented on the aggressiveness of market expectations for ECB rate cuts in 2024. He observed that these expectations do not align with the current data available to the central bank.
Müller further emphasized that wage growth in Eurozone remains out of sync with the ECB’s current inflation targets. He noted that ECB cannot proceed with cutting rates until data reflects the desired price growth conditions.
