ECB Executive Board member Piero Cipollone struck a dovish tone in an interview with Expansión, signaling that recent developments have reinforced the case for further interest rate cuts.
Cipollone noted that at the time of the March meeting, ECB projections already showed inflation converging to the 2% target by early 2026—even under a rate path that included market expectations of cuts below 2%.
Since then, “not only has this narrative been confirmed, but key issues have arisen that have strengthened the arguments in favour of continuing to lower rates”, he added.
Cipollone noted that energy price pressures have already begun to reverse. Meanwhile, Euro appreciation and higher real interest rates are working in tandem to cool price growth.
If US tariffs on European goods materialize, that would have a “negative impact on demand”, which would “further strengthen the downward trend in inflation”. Similarly, escalating U.S.-China trade conflict may push Chinese goods into Europe, adding to price suppression across the bloc.
Notably, Cipollone suggested that inflation could reach target even sooner than the ECB’s latest projections anticipate.
