ECB’s Nagel signals caution, rate cuts possible after summer break

In an interview with Bloomberg TV, ECB Governing Council member and Bundesbank President Joachim Nagel hinted at the possibility of delaying interest rate cuts until after the summer, stating, “Maybe we can wait for the summer break.” However, he was cautious not to delve into speculation, emphasizing, “I don’t want to speculate.” He also empahsized, “it’s too early to talk about cuts.”

Further elaborating on the current market expectations, Nagel addressed the speculations of six 25 basis points rate cuts by ECB this year. He noted, “The markets from time to time are optimistic. Sometimes they are overly optimistic.” This acknowledgment highlights a divergence between market expectations and the ECB’s internal assessments. Nagel’s observation, “I have a different view,” underscores a more cautious and less aggressive approach towards monetary easing.