ECB's Simkus Calls for Immediate Rate Cut

In a significant statement, European Central Bank (ECB) Governing Council member Gediminas Simkus emphasized the necessity of a 25 basis points interest rate cut at the upcoming April meeting. Highlighting the need for a less restrictive monetary stance, Simkus pointed to the recent U.S. tariff announcements as a key factor influencing this decision.

Why a 50-Point Cut is Off the Table

Simkus firmly dismissed the possibility of a more aggressive 50-point rate decrease, labeling it as "too much." He reassured that even after the proposed cut, the rate would remain "at the upper bound of the neutral interval," ensuring a balanced approach to monetary policy.

Looking Ahead: Trade Tensions and Inflation

Addressing medium-term concerns, Simkus warned that escalating trade tensions could have a deflationary impact. He expressed confidence in the ECB's ability to either meet or undershoot its targets, rather than overshooting, in the current economic climate.