ECB Governing Council member Pierre Wunsch emphasized the need for proactive stance on interest rates, acting on the fact that “inflation has gone down, is moving in the right direction”.
Speaking at a news conference for the Belgian national bank’s annual report, Wunsch candidly expressed that ECB is nearing a point where it must “make a bet” on cutting interest rates.
However, he was quick to temper expectations, noting that any decision to cut rates would be made carefully, with a keen eye on the persisting challenges of “service inflation and wage developments”, which are “still running at levels that are ultimately not compatible with our objective”
Despite these concerns, Wunsch indicated that ECB would not delay rate cuts until wage growth falls to 3%.
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