ECB’s Kazaks warns against aggressive rate cuts
European Central Bank Governing Council member Martins Kazaks, while predicting further rate cuts after October, said caution was needed and warned against aggressive easing.
The European Central Bank (ECB) may cut borrowing costs at this month’s meeting and beyond, according to European Central Bank Governing Council member Martins Kazaks.
“The risks to the economy have become more pronounced and the still sticky domestic risks, especially services, inflation and very weak growth, are increasingly being offset by a trend towards weaker growth,” said Kazaks, the Governor of the Bank of Latvia, noting that recent data clearly points to a cut.
Forecasting further rate cuts after October, Kazaks said caution was needed and opposed the prospects for aggressive easing.
While Kazaks said disinflation was “on track” and wage growth was moderating, he saw no reason to declare victory now. “It is too early to say we are done with inflation. Rates still need to remain somewhat restrictive.”
Data released on Tuesday showed inflation fell below the ECB’s 2 percent target in September for the first time since 2021.
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