ECB’s Stournaras: 2Q Data to Get Us Close to Point of Being Able to Cut Rates

10 March 2024

By David Barwick – FRANKFURT (Econostream) – European Central Bank Governing Council member Yannis Stournaras on Sunday said that information to come over the second quarter should put the ECB in a position where it could consider cutting interest rates.

In an interview with the weekly Cypriot edition of Greek newspaper Kathimerini, Stournaras, who heads the Bank of Greece, said, ‘In order to start the cycle of easing ECB policy rates, we need to be confident in the ECB's Governing Council that inflation is steadily converging towards its medium-term objective of 2%.’

Authorities had already made ‘significant progress’ seen also in underlying inflation, he said, while previous policy decisions would continue to exert their effect.

‘However, uncertainty about the outlook for inflation and economic activity remains elevated, also due to global developments and geopolitical shocks’, he said. ‘I believe that, on the basis of economic data that will become available during the second quarter of the year, we will approach the point at which we can reduce policy rates without jeopardising the progress towards price stability achieved so far.’

The transmission of past rate hikes would continue ‘well into this year’, but with no ‘significant negative effects on the economy’, he said.

‘We can now say with great certainty that monetary policy measures have managed to tame inflation without significant side-effects on the real economy and financial stability’, he said.