European Central Bank Governing Council Member Kazaks: Gradual interest rate cuts are expected to continue
European Central Bank Governing Council member Martins Kazaks stated that he expects to continue gradually lowering interest rates, depending on inflation trends and labor market performance. He mentioned that financial markets anticipate several rate cuts in the future, especially at the June meeting. Due to the potential impact of increased tariffs from the United States on the economy, the market expects two to three more rate cuts this year. Kazaks emphasized the uncertainty in the global economy, and other central bank officials expressed similar views
According to the Zhitong Finance APP, Martins Kazaks, a member of the European Central Bank and Governor of the Bank of Latvia, stated that the European Central Bank should be able to continue to gradually lower interest rates.
In an interview on Tuesday, Kazaks said, "Currently, financial markets expect several more rate cuts. Whether we can ultimately lower interest rates will completely depend on the inflation trend, which is closely related to the performance of the labor market. As things stand, there is still a good chance of continuing to gradually lower rates this year."
Following the seventh rate cut of 25 basis points this month, European Central Bank officials are preparing to further reduce borrowing costs. Investors expect the next rate cut to occur at the June meeting. Due to the potential lasting damage to the economy from U.S. tariffs and the expectation that the Eurozone will not achieve the 2% inflation target until 2025, the market anticipates two to three more rate cuts this year.
Kazaks reiterated his previous view, emphasizing that there are still many uncertainties in the global economy.
Kazaks is not the only official to express similar views. Yesterday, François Villeroy de Galhau, a member of the European Central Bank and Governor of the Bank of France, stated that U.S. President Donald Trump's tariff threats have brought uncertainty to the global economy, and as the Eurozone's inflation rate declines, there is still room for further rate cuts in Europe. He said, "We still have room for gradual rate cuts."
Sources revealed last week that as inflation continues to decline, European Central Bank policymakers are increasingly confident about a rate cut in June, but they have little willingness to take significant rate-cutting actions
