ECB‘s Wunsch: Would Take Bad News for Us Not to Cut in June

19 April 2024

By Aurėja Bobelytė – VILNIUS (Econostream) – An interest rate cut would not happen in June only if unexpected shocks occurred, European Central Bank Governing Council member Pierre Wunsch said Friday.

In an interview with CNBC, Wunsch, who heads the National Bank of Belgium, said, ‘We would really need bad news for not cutting in June’.

According to Wunsch, a spike of oil prices or negative inflation prints could affect the timing of an interest rate cut.

Asked if there would be an interest rate cut in July following the June cut, Wunsch said he would remain cautious.

‘[W]e're moving in the right direction, but we will remain data dependent and I would not put too much focus on one or two readings of inflation’, he said.

Services inflation remaining at 4% complicates things, he said, adding that ‘if you cut rates you’re not restrictive anymore for that part of the economy. But at the same time, we are quite restrictive in other parts of the economy where inflation developments are lower’.