European Central Bank (ECB) Governing Council member Mario Centeno expressed that the ECB might accelerate monetary easing if data suggests necessity. Centeno mentioned that the decision could involve a rate cut of 25 or even 50 basis points, emphasizing that data will guide their actions.
Recently, the ECB reduced its key interest rate by 25 basis points, marking the third decrease this year, attributing it to a slowdown in inflation and economic activity. Market analysts expect the ECB to keep cutting rates until they reach 2% or lower by mid-2025, down from the current 3.25% deposit rate.
In a talk at the Peterson Institute for International Economics, Centeno highlighted a gradual but steady path towards more neutral interest rates. He expects these neutral rates to settle around 2% or slightly below, noting the current policy rate is still significantly above this level, indicating further necessary adjustments.
