ECB’s Vasle: Future Rate Cuts Dependent on Incoming Data

2 July 2024

By Aurėja Bobelytė – VILNIUS (Econostream) – European Central Bank Governing Council member Boštjan Vasle on Tuesday said that interest rates could be reduced further this year if everything evolved as expected.

In an interview with Bloomberg, Vasle, who heads the Bank of Slovenia, said, ‘If everything will evolve as expected, we can continue to lower interest rates this year. But I wouldn’t want to tie this to any date — it’s linked to the data we’ll receive.’

The certainty that inflation is moving towards the target has been increasing, he said.

According to Vasle, the pressures on wages caused by the tight labour market was especially important when considering the next steps of the ECB.

‘If wages won’t moderate as expected, then inflation will turn out to be more sticky’, he noted.

Usually domestic drivers of inflation, which drive services inflation, tend to be more persistent, he said. ‘Upcoming monetary-policy decisions should thus make sure that they do not lead to a monetary-policy stance that is structurally too loose over the medium-term.’