ECB's Simkus Calls for Monetary Policy Adjustment

Gediminas Simkus, a member of the European Central Bank (ECB) Governing Council, emphasized the necessity of a 25 basis points interest rate cut at the upcoming April meeting. He highlighted the importance of transitioning to a less restrictive monetary stance in light of recent economic developments.

Impact of U.S. Tariffs on ECB's Decision

Simkus pointed out that the recent tariff announcements by the United States justify a more accommodative monetary policy. Despite the proposed cut, he assured that the interest rate would remain at the upper limit of the neutral range, ensuring a balanced approach to economic stimulation.

Ruling Out a Larger Rate Cut

Addressing speculations, Simkus dismissed the possibility of a 50-point rate reduction, stating it would be excessive. He also shared his medium-term outlook, suggesting that escalating trade tensions could lead to deflationary pressures, with the ECB likely to meet or fall short of its targets rather than exceed them.