ECB’s Schnabel warns against hasty moves following likely June cut

ECB Executive Board member Isabel Schnabel indicated in an interview that if inflation outlook and upcoming data support a sustainable convergence towards 2% target, “a rate cut in June will be likely.”

However, Schnabel emphasized the need for caution regarding further rate cuts. She advised giving the situation “sufficient time” and warned against “moving too quickly”, noting the risk of cutting interest rates too fast. Schnabel stressed that it is crucial to avoid such premature actions.

Regarding the broader economic context, Schnabel observed a “gradual recovery” in Eurozone economy, alongside a continuing decline in inflation. She expressed optimism, stating that these trends justify the hope of “returning to price stability without a recession.”

Full interview of ECB’s Schnabel here.