ECB Member Calls for Less Restrictive Monetary Policy

Gediminas Simkus, a member of the European Central Bank (ECB) Governing Council, emphasized the necessity of a 25 basis points interest rate cut during this month's meeting. He highlighted the need for the ECB to adopt a less restrictive stance in light of recent developments.

Impact of U.S. Tariff Announcement

Simkus pointed out that the recent tariff announcement by the United States justifies a more accommodative monetary policy approach. He reassured that even after the proposed cut, the rate would remain "at the upper bound of the neutral interval."

Ruling Out a Larger Rate Decrease

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