ECB's Approach to Rate Cuts

Yannis Stournaras, a key figure on the European Central Bank (ECB) Governing Council and the Governor of the Bank of Greece, has voiced his support for a gradual and steady reduction in interest rates. This strategy, he suggests, should be informed by ongoing data analysis and aimed at stimulating the Eurozone's economic growth.

Inflation and Monetary Policy

Stournaras highlighted the appropriateness of the ECB's monetary policy adjustments throughout 2024, given the observed decline in inflation. He anticipates that inflation will align with the ECB's 2% target by the second quarter of 2025, creating a conducive environment for further rate cuts in the medium term.

Economic Growth Concerns

Despite the positive outlook on inflation, Stournaras expressed concerns over the Eurozone's GDP growth figures, labeling them as "worrying." He also pointed out the various geopolitical risks that could hinder economic progress. The stagnation in growth, he warned, might lead to inflation falling below the desired target.