MartÃs Kazaks, the president of the Bank of Latvia and a member of the European Central Bank’s Governing Council, weighed on Thursday the possibility of a sharp half-percentage point interest rate cut in December.
When asked about his views on a 50 basis point rate cut at the European Central Bank’s next meeting, he said “everything should be on the table.”
“But we will have a discussion in December,” he told CNBC’s Karen Tso at the International Monetary Fund’s annual meeting in Washington, D.C., on Thursday.
The central banker, who is not usually known for his dovish views, added: “As I said, we will be discussing early next year and meeting after meeting to get closer to 2% (inflation). Target.
His comments come after the ECB publish The October meeting saw the first consecutive rate cuts in 13 years. Just a day earlier, Mario Centeno, president of the Bank of Portugal, made similar remarks.
“The fact is that September’s inflation data were very low, much lower than we expected,” Centeno, known as a dovish member of the ECB’s Governing Council, told CNBC on Wednesday. Doves tend to like low interest rates strive to promote economic growth, while hawks are more concerned about inflation and its impact on society.
“We need to build that into our story,” Centeno said of the recent inflation data. “Then we need to look at the data that’s coming in, the trends in the data that we’ve been observing, and certainly looking at 50 basis points because we’re still relying on the data and the data that we’re getting is pointing in that direction. “
The ECB’s move earlier this month marked the central bank’s third interest rate cut this year and was fully priced in after policymakers said inflation risks were easing and the growth outlook was softening.
The Kazakh stressed that the bank “remains within considerable restrictions”.
“So easing interest rate pressure is certainly what we need to do and that’s what we will do. But of course, you know, we need to look at the data,” he added.
Recent Eurozone Inflation Revise fell to 1.7% in September The previous official estimate was 1.8%. This compares with a 2.2% increase in August.
September was the first month since June 2021 that euro zone inflation fell below the European Central Bank’s 2% target, marking the end of years of excessive price growth and reinforcing expectations of further interest rate cuts in the near future.
