ECB‘s Šimkus: Two More Rate Cuts Possible If Data Allow It

1 July 2024

By Aurėja Bobelytė – VILNIUS (Econostream) – Two more rate cuts in 2024 could be possible, if data support this, European Central Bank Governing Council member Gediminas Šimkus said Monday.

On the sidelines of the ECB Forum of Central Banking in Sintra, Portugal, Šimkus, who heads the Bank of Lithuania, told Bloomberg, ‘Expectations for two more cuts this year are in line with my own thinking, if data evolve as expected.’

There was space for manoeuvre, as monetary policy was still in restrictive territory, he said.

The ECB should not limit itself to acting only at projection meetings, but rather should have the ability to act at any time if a rate cut is needed, he said. Still, he indicated that a July cut was unlikely.

‘We knew that the last mile in the disinflationary process would be difficult and bumpy. But inflation is clearly converging to our target. I don’t think we’re underestimating its stickiness’, Šimkus said.