ECB’s Kažimír: ‘Nearly Done With, if Not Already At, the End of the Easing Cycle’

9 June 2025

By David Barwick – FRANKFURT (Econostream) – European Central Bank Governing Council member Peter Kažimír on Monday said that the ECB was done or almost done cutting rates.

In a blog post on the website of the National Bank of Slovakia, which he heads, Kažimír said, ‘Last week’s decision put us in a comfortable position; we’ve cut rates to reach neutral territory without compromising our ability to respond if inflation were to pick up again.’

There was an increasing sense that the fight against inflation was being won, and ‘real progress’ was being made toward restoring price stability, he said.

‘As things stand now, I think we’re nearly done with, if not already at, the end of the easing cycle’, he said. ‘The next rate steps depend entirely on economic developments and our assessment of these developments.’

It was ‘great news’ that even relatively stubborn price measures were subsiding, but uncertainty was high, with growth subject to ‘clear downside risks’, he said. Policymakers’ job was not yet done, he said.

‘For now, it would be a mistake to neglect upside inflation risks’, he said. ‘We can’t simply assume the path we’re on will be without obstacles.’

In particular, Kažimír warned of possible supply chain disruptions and more pronounced weakness of the global economy.

‘In short, risks in both directions remain very much alive’, he said. ‘Under current circumstances, we need to keep all options open for our future meetings. Monetary policy must remain nimble.’

There should be no pre-committing, he said. The data over summer would decide on the possible need for fine-tuning of the policy stance, he said.

Last Thursday’s rate cut was a ‘waypoint’ that helped ward off ‘unnecessary’ economic weakness while taking into account remaining inflation risks and showing flexibility, he said.

‘Flexibility is the best safeguard of price stability, and that is precisely what we intend to preserve’, he said.