ECB’s Kazimir on rate cut: June preferred, April a surprise, March a no go

In a Reuters interview, ECB Governing Council member Peter Kazimir emphasizd a cautious approach toward rate cuts. Kazimir explicitly stated, “There is no reason to rush a rate cut,” pinpointing June as his “preferred date”. “April would surprise me and March is a no go,” he added.

His comments reflect a strategic desire for a “smooth and steady cycle of policy easing,” contingent on a thorough assessment of the initial steps toward loosening monetary policy.

Kazimir highlighted the rapid disinflation observed at the “headline level”, albeit with remaining uncertainties around core inflation “because wage developments remain unclear.” The upcoming collective bargaining deals are deemed pivotal in clarifying this outlook.

Market forecasts now anticipating a 90bps reduction in interest rates by the year’s end, starting in June. Kazimir acknowledged this revised market sentiment as “more realistic.”