ECB’s Nagel: Probability Increasing of Rate Cut Before Summer Break

8 March 2024

By David Barwick – FRANKFURT (Econostream) – European Central Bank Governing Council member Joachim Nagel on Friday said that it remained uncertain whether the ECB would have to tighten monetary policy further.

In an interview with Table.Media published as a podcast, Nagel, who heads the German Bundesbank, said that a first rate cut in June ‘will depend on the data, that's for sure.’

‘We will go from meeting to meeting’, he continued. ‘Let me put it this way, the probability is increasing that we could potentially see a rate cut before the summer break. But again, that will clearly depend on the data, but the outlook has brightened in this regard, and I would like to note that too.’

The fact that market participants now overwhelmingly saw a rate cut in June at the soonest made him ‘very confident’, he said. ‘So monetary policy is understood in the market. This is also important in order to provide confidence there, to reduce volatility on the markets and so that monetary policy can have its full effect here, too.’