By Investing.com — Yannis Stournaras, a member of the European Central Bank’s Governing Council, has advised that the bank should continue to gradually reduce interest rates, with a goal to bring them close to 2% by the end of the year.
This information was disclosed in an interview with Greece’s Naftemporiki newspaper.
Stournaras noted that Euro-area inflation is slowing down, possibly even more than anticipated, in line with forecasts. He also mentioned that the economy might be weaker than expected due to the potential threat of US tariffs.
Stournaras explained that the ECB should proceed cautiously due to the high level of uncertainty. He suggested that the interest rate cuts should be at the rate of 25 basis points each time. This approach would enable the bank to bring the rates closer to 2% from the current 3% by the end of 2025.
Discussing the potential imposition of trade tariffs on Europe by President Donald Trump, Stournaras expressed his belief that the US government will reconsider before implementing these measures. He also suggested that Europe should appoint a negotiator, such as the European Commission, to handle this crucial issue.
Stournaras added that the ECB is working on various scenarios regarding the potential impacts of the tariffs. However, he emphasized that it is crucial for Europe’s leaders to consider how Europe should respond to possible tariffs.
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