In a newspaper interview published on Sunday, ECB Governing Council member Pablo Hernandez de Cos spotlighted the upcoming economic projections in March as a crucial factor in determining the timing for interest rate cuts.
De Cos outlined two primary considerations that the March projections will address: the confidence level in achieving ECB’s 2% medium-term inflation target and the determination of an interest rate path that aligns with reaching this symmetric target.
Reflecting on past challenges, de Cos acknowledged the ECB’s initial underestimation of the inflationary surge post-pandemic and following Russia’s invasion of Ukraine.
However, he noted a marked improvement in the accuracy of staff projections, highlighting recent instances where inflation figures came in slightly below expectations.
De Cos’s remarks suggest a positive outlook on Eurozone’s disinflation process, describing it as “well advanced” and likely “to continue in the coming quarters.”