ECB’s Kazāks: No Objection to Market Pricing of June Rate Cut

27 March 2024

By David Barwick – FRANKFURT (Econostream) – European Central Bank Governing Council member Mārtiņš Kazāks on Wednesday indicated that he had no problem with financial market expectations of a June ECB rate cut.

In an interview on Latvian state-owned public service television broadcaster LTV, Kazāks, who heads the Bank of Latvia, said, ‘Financial markets are pricing in that it [the first rate cut] could be in June, and I don’t have any objection at the moment to that.’

High uncertainty called for caution, lest inflation resurge, ‘but at the moment it looks like this dragon is pinned to the ground’, he said, in an analogy he has used previously. Policy easing would thus proceed carefully, one step at a time, he said.

‘We need to see how the economy reacts to policy easing’, he said.

Still, Kazāks predicted that inflation would continue falling throughout the euro area.