Exclusive: ECB’s Müller: We Have a Good Case for Being Patient and Monitoring Economic Developments

16 October 2025

By David Barwick and Marta Vilar – WASHINGTON (Econostream) – European Central Bank Governing Council member Madis Müller on Wednesday said that the ECB was in a good position from which to maintain its current monetary policy stance while observing the course of economic developments.

In remarks made to Econostream on the margins of the Annual Meetings of the World Bank and IMF, Müller, who heads Eesti Pank, said, “Based on what I see now, with inflation broadly at 2%, we have a good case for being patient, observing actual economic developments in the coming months and quarters and keeping interest rates where they are: a bit supportive of recovery, not holding back investment or activity.”

For the wait-and-see mode to change and the ECB to cut interest rates again in the foreseeable future, it would require that the economy do “significantly worse than we are assuming,” he argued.

While no one can be sure under high uncertainty, he said, a very reasonable scenario was that monetary policymakers “have reached the end of the easing cycle.” Still, this did not imply a hike in the near future, he made clear, barring a substantive change in the policy environment.

“We have managed to do our part to bring inflation back to target, and it's been there for long enough to say that that the inflationary period, at least for now, seems to be over,” he said. “It's dangerous to say, ‘mission accomplished,’ because that conveys an impression of something permanent, which isn’t necessarily so.”

Müller expressed confidence in the region’s economic recovery, pointing to higher real household incomes and indications of strengthening domestic demand. Government spending on infrastructure and defense – even if the latter were for US equipment – would also help, he reasoned.

Müller expressed confidence in the region’s economic recovery, pointing to higher real household incomes and indications of strengthening domestic demand. Government spending on infrastructure and defense – even if part of the latter is spent on equipment from the US – would also help, he reasoned.

“So, I think there's a relatively convincing story that the domestic demand side, in particular, will gradually recover, even if we don't expect much from exports,” he said.

Müller, whose non-renewable term at Eesti Pank ends next June 6, reacted cautiously to the idea of potentially being tapped for one of the upcoming ECB Executive Board vacancies.

“I believe in putting all one’s energy in the job one has, so I have not given any thought to this,” he said. “I will cross that bridge if and when I come to it.”