ECB’s Holzmann: ‘Quite Likely’ We’ll Cut Rates in June, if Data Justify It

3 April 2024

By David Barwick – FRANKFURT (Econostream) – The European Central Bank will very probably cut rates in June if available information warrant the move, hoping in this case that the US Federal Reserve does the same later in the month, ECB Governing Council member Robert Holzmann said Wednesday.

In an interview with Reuters, Holzmann, who heads the Austrian National Bank, said that while the April Governing Council meeting was ‘not on my radar’, at the subsequent one in June ‘we will have more information.’

‘If by June the data shows a strongly-based environment for a cut, a week before the Fed makes its own decision, then quite likely we'll do it, hoping that the Fed comes along’, he said. ‘If it doesn't come along, then it may reduce the economic impact of our move.’

Holzmann assured that he had no ‘in-principle objection’ to a June rate cut, insisting only on first seeing the data and then remaining data-dependent.

The wideness of the productivity gap with the US could make a deposit rate of 3% ‘too tight’, he suggested.