In a speech today, ECB Governing Council member Joachim Nagel stressed the importance of caution in making further interest rate cuts, citing ongoing economic uncertainty and persistent inflation pressures.
Nagel remarked, “I don’t see us on a mountain top from which we will inevitably come down. Rather, I see us on a ridge where we still have to find the right point for a further descent,” indicating the need for a measured approach on monetary policy.
Nagel projected that inflation in Eurozone area would gradually decrease towards the ECB’s target, reaching 2% by the end of 2025, albeit later than previously expected. This suggests a longer path to achieving stable inflation, necessitating careful policy decisions.
Earlier today, fellow Governing Council member Peter Kazimir underscored the ongoing battle against inflation, referring to it as the “inflation beast.” Kazimir emphasized that the upcoming September meeting will be pivotal for determining the necessity of further rate cuts.
