ECB Sees Stable Inflation Outlook as Official Signals No Rush to Cut Rates
Eurozone policymakers are signaling calm over the inflation outlook, with the European Central Bank suggesting that no immediate changes to interest rates are on the horizon.
Executive Board member Piero Cipollone described the region’s economy as holding up better than expected, even as global trade tensions weigh on sentiment. He argued that, after a temporary cooling of activity this quarter, growth should return to a steadier pace.
According to Cipollone, inflation dynamics remain well anchored, with expectations consistently in line with the ECB’s 2% goal. That stability, he said, gives officials confidence that monetary policy is correctly positioned.
While markets have largely dismissed the possibility of further cuts to the 2% deposit rate, some within the central bank want to revisit the issue when new forecasts are published in December. Those projections are expected to clarify the effect of U.S. tariffs and whether price growth could slip below target.
So far, President Christine Lagarde has avoided offering her own assessment of the balance of risks, leaving board members like Cipollone to emphasize the ECB’s readiness to adapt if conditions change. He noted that officials will weigh a broad set of data later this year before deciding if adjustments are needed.
For the moment, the message is one of cautious reassurance: the ECB views the economy as resilient, inflation as stable, and policy as appropriately tight—while keeping the option open to act swiftly should circumstances demand it.
Source: Bloomberg
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