ECB‘s Kazāks: High Probability of June Rate Cut

18 April 2024

By Aurėja Bobelytė – VILNIUS (Econostream) – Although European Central Bank interest rates would likely be cut in June, monetary policy would remain restrictive and it would take a while to reach neutral rates,  ECB Governing Council member Mārtiņš Kazāks said Thursday.

In an interview with CNBC, Kazāks, who heads Latvijas Banka, said, ‘In June there is a high probability that we will start the easing cycle, but one has to realise that we are quite deep into restrictive territory and that means that even with cuts gradually starting, we still remain in a restrictive territory, so it’s a long path to get to the neutral rates.’

According to Kazāks, the ECB had to remain cautious, data-dependent, and follow a meeting-by-meeting approach, as risks to the economy were still possible.

‘[W]e are not about to declare any victory over inflation. What we are seeing at the current moment is that we can ease the restrictions so that this disinflationary process can proceed further’, he said.