Austrian ECB Governing Council member Robert Holzmann emphasized caution regarding rate cuts, citing renewed inflation risks from tariffs.
Speaking to CNBC, Holzmann noted that while inflation pressures had previously “somewhat dissipated,” the latest developments, particularly increased trade frictions, pose fresh threats to price stability. As a result, policymakers must be careful in their approach on policy easing.
Holzmann explained that while increased trade barriers may reduce economic growth, they also contribute to inflationary pressures. “We will have to be more patient,” he stated.
Addressing speculation about a larger 50 basis point rate cut, Holzmann dismissed the idea, arguing that ECB’s mandate is to manage inflation, not stimulate growth.
“Using the interest rate in order to initiate a higher growth is not the way how we should work,” he stated.
