European Central Bank Governing Council member Olli Rehn sees emerging conditions that will allow borrowing costs to be cut more than once this year, with the first such move expected to come closer to the summer.
I see the approach of summer as the right time to start easing the tight monetary policy approach, Rehn said in an interview with YLE TV1 on Saturday. If inflation stabilizes sustainably at 2 percent and no negative shocks emerge - such as the energy crisis - then I think we will have the prerequisites to cut interest rates several times over the course of this year.
ECB officials are on track to deliver their first interest-rate cut in June—once they are convinced that consumer price increases will return sustainably to 2%. That could shift the debate over the path of monetary policy further, with some of Rehn’s colleagues already speculating about where borrowing costs will go in the rest of 2024.
The most specific comments this week came from Yiannis Stournaras of Greece, who told Bloomberg he would like to see two cuts before the ECB’s August holiday, followed by two more by the end of the year.
Asked about the path of interest rates, Ren said he favored gradual assessment based on the latest data. We have a lot of meetings, and we can make decisions one meeting after another, he added.
