ECB’s Interest Rate Strategy

Yannis Stournaras, a member of the European Central Bank’s Governing Council, suggests a gradual reduction of interest rates towards 2% by the year’s end, as reported in an interview with Naftemporiki.

Stournaras highlighted a slowdown in Euro-area inflation, possibly exceeding forecasts, and expressed concerns over a potentially weakening economy due to the threat of US tariffs. He advised the ECB to proceed cautiously amid significant uncertainty, proposing cuts of 25 basis points at a time to reach the target from the current 3% by the end of 2025.

Regarding the anticipated trade tariffs from President Donald Trump, he believes the US may reconsider their implementation and urged Europe to appoint a negotiator, likely the European Commission, for this vital matter. Stournaras remarked that various scenarios are being evaluated by the ECB concerning the tariffs’ impact, emphasizing the need for European leaders to strategize an appropriate response.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.