In a speech today, ECB Governing Council member Olli Rehn indicated that the ongoing disinflationary process is bringing inflation closer to the 2% target in a sustained manner. He stated, “the time is thus ripe in June to ease the monetary policy stance and start cutting rates,” provided the current disinflationary trend continues and there are no new geopolitical or energy price shocks.
Rehn emphasized ECB’s commitment to a data-dependent, meeting-by-meeting approach in determining its policy stance. He noted, “We will set our rates based on our analysis of the inflation outlook, the dynamics of underlying inflation, and the strength of monetary transmission,” adding that the ECB is not pre-committing to any specific rate path.
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