ECB’s Kocher: ECB Must Keep “Full Optionality” on Rates Amid Trade Uncertainty

27 January 2026

By David Barwick – FRANKFURT (Econostream) – European Central Bank Governing Council member Martin Kocher on Tuesday urged policymakers to keep all options open on interest rates in the context of still high global uncertainty and especially prominent trade risks.

While the ECB is “in a good place,” uncertainty is “still very high,” the Austrian central-bank head told Bloomberg Television, arguing that policymakers need “full optionality” in both directions.

“Monetary policy has to be able to react to any kind of risks manifesting themselves quickly and decisively,” Kocher said, adding, “We want to be able to react quickly to anything that happens.”

Kocher pointed to renewed tariff threats as an example of how abruptly the backdrop can shift, warning there could be “repercussions” and “effects on the development of the European economy.”

Downside risks were “quite substantial,” he said, while also citing German stimulus and Europe’s “very high” savings rate as potential sources of support for growth.

On inflation, Kocher said modest deviations from target would be acceptable, but argued that clearer movement “in any direction” would warrant close monitoring and a policy response if data accumulate in that direction.

The ECB needed to watch whether euro appreciation continues, possibly at a faster rate, in the coming weeks and months, while adding, “We don’t see that at the moment.”