ECB‘s Rehn: First Rate Cut Likely in June Assuming No Further Setback

16 April 2024

By Aurėja Bobelytė – VILNIUS (Econostream) – An interest rate cut could happen in June, assuming that there would not be any geopolitical setbacks and inflation would continue to decline, European Central Bank Governing Council member Olli Rehn said on Tuesday.

In a press conference in Helsinki, Rehn, who heads the Bank of Finland, said, ‘As summer approaches we can start reducing the level of restriction in monetary policy, provided that inflation continues to fall as projected. The biggest risks stem from geopolitics, both the deteriorating situation in Ukraine and the possible escalation of the Middle East conflict, with all their ramifications’.

According to Rehn, if the data in June led to greater confidence that inflation was sustainably declining to the 2% target, monetary policy could be eased.

‘This assumes there will be no further setbacks, for instance in the geopolitical situation and therefore in energy prices’, he said.

‘The ECB takes its interest rate decisions meeting by meeting in light of the latest information, without tying its hands in advance to any specific interest rate,’ Rehn said.