ECB’s Müller: Further Monetary Policy Easing Possible if New Data Allow It

2 July 2024

By Aurėja Bobelytė – VILNIUS (Econostream) – Monetary policy could be eased further this year if incoming data support the latest projections, European Central Bank Governing Council member Madis Müller said Tuesday.

In an interview with Bloomberg, Müller, who heads the Bank of Estonia, said, ‘If the actual outcome ends up being close to our latest projections, then we most likely can further reduce the level of policy restrictiveness this year. When exactly and how much remains to be seen.’

Due to the high readings for core and services inflation and robust wage growth, the ECB must remain patient and move gradually, he said.

‘There is a risk of underestimating the stickiness of inflation, but we will remain vigilant’, he said.

According to Müller, monetary policy was likely to stay restrictive for some time, even if interest rates would be lowered further. ‘It’s most likely that at the end of the year we will still be in restrictive territory’, he said.

‘At meetings with projections it’s possible to have a fuller discussion and it’s easier to decide on interest-rate changes. Though, I wouldn’t exclude acting at interim meetings. But it seems very unlikely that we will have the next decision already in July’, he noted.