Europe may not have to wait much longer for eagerly anticipated interest rate cuts. Two key European Central Bank (ECB) figures have reportedly indicated that the time has come to ease levies on lending fees.
Key ECB Figures Hint At Possible June Rate Cuts
Based on CNBC information, the leader of the Bank of Finland and council member of the ECB, Olli Rehn, said that Euro bloc inflation is decreasing steadily. Data reflected an April 2024 inflation rate of 2.4%. This means that it has been below 3% for seven months straight.
Don’t miss out the latest news, subscribe to LeapRate’s newsletter
The May 2024 records will be published on Friday, 31 May 2024. CNBC cited Rehn, who stated:
Thanks to this disinflationary process, inflation is converging to our 2% target in a sustained way, and the time is thus ripe in June to ease the monetary policy stance and start cutting rates. This obviously assumes that the disinflationary trend will continue and there will be no further setbacks in the geopolitical situation and energy prices.
The Financial Times reported that Philip Lane, chief economist at the ECB, echoed this view. He said:
Barring major surprises, at this point in time there is enough in what we see to remove the top level of restriction.
Should the expected rate cuts materialise at the ECB’s meeting on 6 June 2024, the bank would make this move sooner than the US Federal Reserve, the central bank that ordinarily sounds the bell for any monetary changes. CNBC quoted Claudio Irigoyen, a Bank of America economist, who said:
The Fed and the ECB look set to decouple, with an ECB cut likely in June while bracing for high-for-longer in the US.
