ECB Comment Recap: Policymakers Broadly Agree on Further Easing, When to Stop Remains Unclear

30 May 2025

By Marta Vilar – MADRID (Econostream) – Following is a collection of views expressed by ECB Governing Council members on various topics of high relevance related to next week’s meeting and the further evolution of monetary policy:

June decision:

27 May – Holzmann: ‘Moving further south would be more risky than staying where we are and waiting until September.’ Another cut likely to have ‘no effect’ on economic activity.
27 May – Patsalides: ‘While the prevailing disinflationary trend has strengthened on one hand the case for easing, that doesn’t automatically make a cut the “default”, especially in a world where geopolitical tensions, rolling shifts in trade policy or renewed commodity price pressures could quickly reverse the picture’
27 May – Villeroy: ‘And this normalisation process may not yet be over: we will see during next week’s Governing Council meeting.’
26 May – Šimkus: ‘I see scope for an interest rate reduction’ in June
23 May – Rehn: ‘If the incoming data and the macroeconomic analysis confirm the current outlook for stabilisation of inflation and somewhat subdued growth, the appropriate response in June would be to continue monetary easing and cut interest rates.’
23 May – Stournaras: ‘I believe we will cut interest rates one more time in June and then I see a pause.’
20 May – Knot: ‘I can’t exclude we will decide to have another rate cut in June, but I also can’t confirm it.’
17 May – Schnabel: ‘We can leave rates broadly at the level they are at now and are confident that we can also maintain price stability in this way.’
16 May – Kazāks: ‘Market pricing for the next meeting is relatively appropriate in my view, but later on we’ll see.’
14 May – Nagel: ‘The best is that we will wait until our June meeting, take a look at what new data is giving us as additional information, and then we will see’
13 May – Villeroy: ‘The Trump administration’s protectionism will lead to a restart of inflation in the United States, but not in Europe, which will likely allow for another rate cut by the summer.’
12 May – Kazāks: ‘financial markets at the moment are expecting another rate cut in June, looking at today’s data, that is a pretty possible step.’
9 May – Šimkus: ‘it’s obvious that for me the June decision is quite clear, I think another cut in June is needed’
9 May – Rehn: If disinflation and weaker growth and confirmed in June forecast, ‘then in my view in order to achieve our 2% symmetric inflation target over the medium term, the right reaction in monetary policy is to cut rates.’
5 May – Stournaras: It sems that we will continue [cutting rates], but of course everything depends.’
3 May – de Guindos: ‘All these elements [exchange rate, cheaper energy and uncertainty from tariffs] contribute to bringing inflation further down. And this is the decisive factor in whether we continue to lower interest rates.’
30 April – Šimkus: ‘In my understanding, it would be an appropriate decision to proceed with the interest rate cut in June.’
26 April – Šimkus: ‘Within the current economic context, I don’t see a reason to stay [at 2.25%].’
25 April – Holzmann: June decision ‘completely open’
24 April – Knot: ‘Fully-open minded’ about June decision, it is ‘too early’ to say which option would be best.
24 April – Holzmann: ‘unless the uncertainty subsides, by the right decisions, we will have to hold back a number of our decisions, and hence, we don’t know yet in what direction monetary policy should be best moved.’
24 April – Rehn: if updated forecasts indicate medium-term price stability, ‘in my view the right reaction in monetary policy would be to ct rates further, in line with our strategy.’

50bp cut:

27 May – Patsalides: ‘A 50bp rate cut would only be justified if the risks of recession within the euro area were to intensify, leading to more pronounced cyclical disinflationary pressures; however, this is not a highly probable scenario … Consequently an aggressive cut appears unwarranted at this time.’
27 May – Lane: ‘If we see signs of further falling inflation, we will respond with further interest rate cuts – but the range of discussion is not that wide: no one is talking about dramatic rate cuts.’
18 May – Wunsch: No reason for cutting by 50bp in the short term
5 May – Stournaras: ‘when there is a lot of uncertainty, you don’t move forward with big steps, nor do you make big promises, because you might fall out’
30 April – Šimkus: ‘I don’t find this outcome likely.’

Monetary policy approach:

27 May – Nagel: ‘That said, it will not always be the case that cautious monetary policymaking is a good response to high uncertainty. I am talking about situations in which a “wait-and-see” attitude increases the risk that the outcome will be particularly unfavourable. Going back to the dark room I mentioned just now: if the flames are right behind you, you should not edge your way forwards in small steps. A scenario where inflation expectations risk drifting off might be just such a case. Then, a vigorous response would be appropriate to protect yourself from this worst-case scenario.’
22 May – Nagel: Given the still-significant level of uncertainty, the ECB should stick to a ‘cautious’ approach in monetary policy.
13 May – Makhlouf: ‘In my view, one thing that is clear is that monetary policy must adapt to the new nature of supply shocks generated by geoeconomic fragmentation. Given the effects of the size, scale and more persistent nature of fragmentation-induced shocks, and their impact on prices, our monetary policy responses will need careful calibration.’
13 May – Nagel: ‘In monetary policy it is important to be cautious and not overreact, giving undue weight to specific announcement that could change shortly afterward.’
5 May – Panetta: ‘Trade barriers and heightened uncertainty are key variables we must closely assess when formulating monetary policy in the euro area, as they both affect economic growth and the transmission of policy decisions.’
22 April – Kažimír: Circumstances called for ‘a balance of caution and pragmatic optimism.’

Restrictiveness of rates for growth:

27 May – Holzmann: ‘Key economic decisions by market participants are delayed and not taken … People want to wait’. In such a context, a reduction in interest rates would not do much — if anything, he said.
27 May – Patsalides: ‘the real obstacles to growth lie not in the current level of interest rates, but rather in the broader environment of uncertainty and weak confidence, which monetary policy alone cannot fully address.’
19 May – Müller: ‘Interest rates are already low enough that they don’t hold back our economic recovery.’
10 May – Schnabel: ‘By keeping interest rates near their current levels, we can be confident that monetary policy is neither excessively holding back growth and employment, nor stimulating it.’
22 April – Kažimír: ‘The recent series of interest rate cuts has placed us in a neutral range. Our policy stance is no longer restrictive and does not hinder economic activity.’
18 April – Müller: ‘We can say even more clearly that interest rates are no longer a constraint on economic activity.’

Next steps/terminal rate:

30 May – Panetta: ‘The previous cuts clearly leave less room for reducing interest rates further. However, the macroeconomic outlook remains weak and trade tensions could cause it to deteriorate, though it is hard to say how and when that might play out.’
28 May – Knot: ‘Against this uncertain, but for now relatively symmetrical, backdrop a monetary policy stance that I neither accommodative nor restrictive is my view appropriate.’
27 May – Lane: ‘We need to find a middle path. If we keep interest rates too high for too long, the disinflation pressure of US tariffs could cause inflation rates to fall below our target. If we cut too much and too quickly, a strengthening economy and other factors could drive inflation back up … If we see signs of further falling inflation, we will respond with further interest rate cuts – but the range of discussion is not that wide: no one is talking about dramatic rate cuts.
23 May – Lane: ‘There is a debate about maybe we go below 2% in the near term, but nor for very long, so the steady state is expected to be around 2%’
22 May – Nagel: ‘After seven interest rate cuts, our deposit rate stands at 2.25%, a level that can certainly no longer be described as restrictive.’
21 May – Centeno: ‘We may have to go below the neutral rate’, estimated to be between 1.5% and 2%.
19 May – Müller: Further easing is warranted, but it is ‘not obvious to me that we should significantly lower rates’
18 May – Wunsch: ‘If I look at the economy — the shocks we are confronted with and the uncertainty on growth — it might warrant to be mildly supportive’
16 May – Kazāks: ‘We are by and large, within the baseline scenario. If the baseline scenario materialises, then I think we are relatively close to the terminal rate already … A couple more rate cuts are possible, but will depend on how trade tensions develop’
12 May – Kazāks: ‘Gradual, cautious cuts could come with the anchoring of inflation to around the 2% target’
10 May – Schnabel: ‘the most appropriate policy response to the potential risks to price stability arising from fiscal expansion and protectionism is to keep a steady hand and maintain rates close to where they are today – that is, firmly in neutral territory … Therefore, from today’s perspective, an accommodative monetary policy stance would be inappropriate, also because recent inflation data suggest that past shocks may unwind more slowly than previously anticipated.’
9 May – Šimkus: I cannot ‘reject the chances that there might be another cut after June, be it in July, September or even December’.
29 April – Stournaras: ‘Monetary policy in 2025 is expected to become progressively less restrictive, as policy rates, in my view, will continue to decline until they reach 2%.’
29 April – Kazāks: ‘At the moment it looks pretty hopeful that step-by-step cuts could also continue this year.’
28 April – Villeroy: ‘We still have room for gradual interest rate cuts.’
28 April – Rehn: ‘If inflation is projected to fall below our 2% inflation target over the medium term, then the right reaction is to cut rates further. I think it is important that we do not let any thresholds, such as an estimated neutral rate, constrain us.’
26 April – Šimkus: ‘With data at hand, I can’t exclude two more cuts to come this year. But in order to go further, we’d need to see more negative surprises.’
23 April – Knot: Inflation outlook looks more symmetric in the medium term given high uncertainty. ‘For me, this suggests that a policy rate that is neither accommodative nor restrictive broadly remains the place to be.’

Market expectations:

18 May – Wunsch: ‘The way I read them is that, somewhere around the end of 025, we could be mildly supportive.’
10 May – Vujčić: Markets are expecting further cuts after seven interest rate reductions, but the ECB’s future decisions will depend on inflation.
29 April – Stournaras: ‘Markets are pricing in further reductions, but I believe that we should be cautious in view of the very high level of uncertainty.’

Neutral rate:

27 May – Lane: ‘I would differentiate between the three policy rate zones: a clearly restrictive one with rates say in the high twos or above; and a clearly accommodative one – for the sake of discussion, say rates below 1.5% are clearly accommodative. Going there would only be appropriate in the event of more substantial downside risks to inflation, or a more significant slowdown in the economy. I do not see that at the moment. And there is a zone in between, where it is more of a question of cyclical management. We are navigating in that zone at the moment.’
27 May – Holzmann: Neutral rate to be between 2.5% and 3%. ‘Most if not all of the recent estimates on [the neutral rate of interest] for Europe point to quite a strong increase since the beginning of the year 2022. We are already at least at the neutral level.’
26 May – Šimkus: Rates now at upper end of neutral territory
14 May – Nagel: ‘I do not know where neutral rate is, so I am open to incoming data and then I will take a decision’

Core/services inflation/wages:

27 May – Lane: ‘I am saying “mostly” because some final steps still need to be taken. For example, services inflation is still too high. But we expect it to decline in the coming months, as we think wage inflation is coming down’
27 May – Nagel: ‘We are on the right path, even if it remains rocky. The core rate has recently risen again. At 4 %, prices for services, in particular, have seen surprisingly steep growth.’
27 May – Patsalides: ‘Despite this uptick [in core inflation], the overall disinflationary trend is expected to continue as base effects and seasonal factors normalise over time.’
23 May – Lane: ‘Services inflation went up fairly quickly and it is remaining roughly high. Now we think, forward-looking, it is going to come down’
16 May – Kazāks: ‘Inflation is close to what as expected, the uptick in services inflation is within the baseline’
10 May – Schnabel: ‘In the euro area, there are two main forces that could have the size and persistence to pull underlying inflation sustainably away from our 2% medium-term target … But on balance, the fiscal impulse is likely to put upward pressure on underlying inflation over the medium term … there are risks that a lasting and meaningful increase in tariffs will reinforce the upward pressure on underlying inflation arising from higher fiscal spending over the medium term.’
3 May – de Guindos: We are ‘seeing signs of a slowdown’ in services inflation

Risks to growth/inflation:

30 May – Panetta: ‘On the inflation front, energy prices have fallen considerably and the euro has strengthened. Together with weak economic growth and intense global competition, these developments could dampen consumer price inflation … A further appreciation of the euro, growing uncertainty or tighter financial conditions could magnify the recessionary impact of the tariffs. Moreover, a larger-than-expected increase in Chinese exports to Europe could push down production and inflation. Conversely, swift and tangible progress in trade negotiations would mitigate downside risks to economic activity. The anticipated increase in public spending in Europe could support growth, with the effects appearing gradually over time. Disruptions to global supply chains would put upward pressure on inflation.’
28 May – Knot: ‘While near-term risks to growth and inflation are clearly tilted to the downside, the outlook over the policy-relevant medium term is more ambiguous. Even if demand remains subdued due to heightened uncertainty, persistent disruptions in global supply chains and retaliatory trade measures could exert upward pressure on prices. Moreover, the fiscal impulse, particularly from increased defence spending, will contribute positively to inflation.’
26 May – Šimkus: ‘The risks that inflation will be below the objective in the future have increased.’
21 May – Escrivá: The distribution of risks around the baseline scenario is to the downside. If these risks were to materialise, which is not very likely, their impact would be significant and could result in lower projections.’
21 May – Centeno: ‘The ECB is paying great attention to these balances and we cannot run the risk of having a monetary policy that puts inflation at a negative value.’
20 May – Knot: ‘Ultimately we have to focus on the medium to long term, where the impact on inflation is a lot more uncertain than in the short term.’
17 May – Schnabel: Lower energy prices and a weaker economy could be disinflationary in the short term, but turn out to be inflationary in the medium term
10 May – Schnabel: ‘Over the medium term, risks to euro area inflation are likely tilted to the upside, reflecting both the increase in fiscal spending and the risks of renewed cost-push shocks from tariffs propagating through global value chains.’
9 May – Rehn: ‘there are several issues in the field of the inflation outlook which in fact imply a downward short-term trend in inflation’
2 May – Makhlouf: ‘the market response to recent events has led to a tightening of financing conditions. All of these factors are a negative for the economic outlook for the euro area, and a downside risk for inflation in the near term … However, for the more policy-relevant medium term outlook, the risks are less clear’
29 April – Stournaras: Downside risks to growth are ‘significant’
28 April – Rehn: ‘Taking into account these developments, I find it reasonable to assume that there are downside risks to the inflation outlook in the ECB’s March projections’
24 April – Knot: ‘in the medium term the inflation outlook is not at all that clear.’
18 April – Villeroy: ‘the inflationary risk seems rather weak, it’s even quite likely that the risks to inflation today are downward’

Inflation target:

22 May – de Guindos: ‘Inflation can return to the 2% symmetric target relatively quickly.’
22 May – Vujčić: ‘Inflation is slowly but systematically converging to our target.’
14 May – Nagel: There is a ‘good probability’ that inflation will return to its 2% target and ‘this per se is good news’
13 May – Villeroy: I do not ‘see inflation picking up’
10 May – Vujčić: ‘we expect inflation to continue to fall, and in some months the inflation could even stall, but the trend won’t be stopped.’
28 April – de Guindos: ‘Looking ahead, inflation is expected to hover around our target.’
23 April – Nagel: Inflation to reach 2% in 2025 despite high uncertainty
23 April – Nagel: Recent data suggest ‘a lot of, let me say, good news when it comes to the inflation story’
22 April – Lagarde: ‘The latest [inflation] reading was 2.2% and I think that we’re heading towards our target … in the course of 2025, so that that disinflationary processes is so much on track that we are nearing completion. But we have the shocks.’

Economic growth:

22 May – de Guindos: ‘European economic growth in 2025 will be very modest, very limited’
15 May – de Guindos: ‘Risks to growth resulting from trade tensions combined with higher defence spending may limit the fiscal space available to shield the economy from adverse shocks’
13 May – Villeroy: ‘At this stage, we see slower growth for 2025, but without a recession.’
24 April – Lane: ‘There is a markdown, but it is important to say it is a markdown to a little bit less. It’s still a growing economy.’
22 April – Rehn: ‘the trade war initiated by President Trump has created extraordinary uncertainty, which is also holding back economic growth in the Eurozone.’
21 April – Kazāks: ‘Current forecasts for the Eurozone still promise around 1% growth this year, but it is slow and the risks are clearly on the downside. Recession is not currently the base scenario, but with potentially such large-scale changes in geopolitics and global trade, its probability is high.’

Inflation impact of tariffs:

27 May – Lane: ‘For the time being, there are some factors that tend to support a drop in euro area inflation. However, the picture could shift if, for example, the negotiations between the EU and the United States fail, with the United States imposing higher tariffs and the EU implementing counter tariffs. Supply chains could also be disrupted – this could drive up inflation … In the coming months, in other words for the remainder of 2025, the inflation rate is expected to be close to target. Over the medium term, the impact of US tariffs on inflation could materialise, including through the exchange rate and energy prices. Looking further ahead to the long term, analysts and financial markets are reasonably confident that inflation will return to the ECB’s target. The main focus of the ECB’s monetary policy is on the medium-term horizon: that is to say, one or two years ahead.’
27 May – Nagel: ‘The Bundesbank has simulated the impact of US tariff policy effective in mid-April, China’s retaliatory measures, and the immediate exchange rate response. The results suggest that economic output in the euro area could be just under half a percentage point lower over the medium term … On the one hand, weaker growth tends to dampen prices. Potential diversion effects resulting from more goods from China in the European market might also leave inflation somewhat lower. On the other hand, any retaliatory tariffs imposed by the EU would fuel inflation.’
27 May – Patsalides: ‘Tariffs are currently more likely to exert downward pressure on inflation in the short term. In the longer term, trade barriers are and obstacle to growth. But as we move forward the net impact becomes less clear’
27 May – de Guindos: ‘We do not know what the final outcome of the ongoing trade negotiations will be, but they have certainly created uncertainty and volatility. They are affecting investment, weakening household confidence and reducing the growth prospects of the European economy. The trade negotiations are still ongoing but, ultimately, the level of tariffs is likely to be higher than it was before the start of the new US Administration. And we shouldn’t only focus on bilateral tariffs between the United States and the EU – we also need to look at global trade patterns and disruptions. If China redirects its exports to Europe, for example, the impact will be significant.’
21 May – Escrivá: ‘[The impact of] tariffs is harder to assess because that would depend on their size, the extent of retaliation and the possibility of second-round effects’
18 May – Wunsch: US policies clearly present ‘downside risks to inflation’ in the Eurozone and were a threat for inflation
13 May – Villeroy: ‘The Trump administration’s protectionism will lead to a restart of inflation in the United States, but not in Europe, which will likely allow for another rate cut by the summer.’
13 May – Knot: ‘High uncertainty due to US tariffs is an absolute negative for economic growth in the short run – it’s probably also a negative for inflation. But in the medium-term inflation impact is a little but more ambiguous, and that’s something that we have to find out and the we have to closely monitor’
13 May – Escrivá: ‘while the impact [of US trade policies] on GDP … is far more clear-cut, on inflation it is far more difficult to grasp in advance, nd there are potential dynamics moving in opposite directions.’
10 May – Vujčić: Trade tensions tend to have a negative impact on the economy and they can also dampen inflation
5 May – Stournaras: Tariffs would probably only lead to temporarily higher US inflation and even if Europe were to impose countermeasures, it would do so ‘selectively, it will not create inflation’
2 May – Makhlouf: ‘With the exceptional uncertainty around where things might finally land, it is difficult to say what the impact of US tariffs, and any retaliation by the EU and others, is likely to have on inflation in the euro area.’
29 April – Cipollone: ‘The short to medium-term effects may even prove disinflationary for the euro area, where real rates have increased and the euro has appreciated following US tariff announcements’
28 April – de Guindos: Trade tensions created more uncertainty around the inflation outlook
28 April – Rehn: Markets were correct in expecting inflation to fall in the short-term due to tariffs
25 April – Holzmann: ‘so far, the net impact from the US tariff announcements seems to be rather deflationary than inflationary.’
24 April – Holzmann: ‘Without countermeasures, quite likely the price pressure is downward. And for the time being, we don’t know yet the direction.’
23 April – Knot: ‘For the medium term, however, there is still the risk that disruptions in global supply chains will put upward pressure on prices’
23 April – Lagarde: ‘In particular, if there are no countermeasures decided by Europe, I think the net inflation outcome is uncertain at the moment, but it is probably going to be disinflationary more than inflationary.’
22 April – de Guindos: Tariffs could even be deflationary in the end despite an initially inflationary impact
22 April – Rehn: Inflation impact of tariffs is ‘mixed’ … ‘the overall impact on inflation in the euro area will be moderate, and at least downward in the short term.’
18 April – Müller: It remains to be seen if trade tensions will ultimately lead to supply chain disruptions and thus inflation, but fragmentation is generally inflationary
17 April – Escrivá: It is still hard to say what the net impact of tariffs will be on inflation, ‘it will depend on how negotiations play out, among other things.’

Inflation impact of defence spending:

27 May – Nagel: ‘As stated in the account of our April meeting: A boost in defence and infrastructure spending could also lift inflation over the medium term.’
27 May – Holzmann: Germany’s spending plans were another reason for the ECB to keep ‘a steady hand’.
18 May – Wunsch: Higher defence and infrastructure spending in Germany would not be able to compensate the disinflationary effect from tariffs in the near term
18 April – Müller: Higher German spending would support growth in the wider region but could also produce price pressures

Inflation expectations:

27 May – Nagel: ‘We therefore need to be particularly vigilant when it comes to the evolution of inflation expectations. For instance, medium-term inflation expectations amongst euro area households and firms were recently on the rise again. Concerns about rising prices caused by tariff policy are not only on American minds, then. We will keep a close eye on this development.’