ECB’s Nagel: Rates ‘Certainly’ No Longer Restrictive, Must Remain Cautious

22 May 2025

By Marta Vilar – MADRID (Econostream) – European Central Bank Governing Council member Joachim Nagel said on Thursday that rates were no longer restrictive and that the ECB should proceed with caution.

In a press conference with the German minister of finance on the sidelines of the G7 meeting in Canada, Nagel, who heads the Bundesbank, said that ‘[a]fter seven interest rate cuts, our deposit rate stands at 2.25%, a level that can certainly no longer be described as restrictive.’

Given the still-significant level of uncertainty, the ECB should stick to a ‘cautious’ approach in monetary policy, he said.

‘I don’t believe in predetermining whether there might be further interest rate cuts,’ he said. ‘I will not make a decision on monetary policy until our next meeting.’

The ECB will reach its 2% inflation target in 2025, he said.

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