HomeFinancial MarketsECB Official Warns That Rate Cuts Unlikely in Early 2024

ECB Official Warns That Rate Cuts Unlikely in Early 2024

European Central Bank Governing Council member Martins Kazaks has warned investors to lower their expectations of an interest rate cut during the first six months of 2024. This comes despite the ECB remaining on track to reaching its 2% inflation target after lifting rates for a 10th consecutive time in its policy meeting last week.

“The market shouldn’t expect that we would jump too early to cut rates,” Kazaks explained during an interview. “We’ll start cutting rates when we see that we consistently and significantly start to undershoot our target, and what I can say clearly is that expectations of a rate cut in spring or early summer in my view are not really consistent with the macro scenario that we have.”

According to projections that were presented last week, inflation in the eurozone is expected to take another two years to reach 2% as it stands, even if price pressures continue to cool. Having remained stagnant throughout 2023, the Eurozone economy is expected to achieve quarterly growth rates of around 0.4% in 2024.

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