The ECB's Valimaki today issued a view that attracted the attention of the market. According to him, the European Central Bank is making progress in bringing inflation down to 2%, but needs more data before a rate cut is in the discussion, and policymakers should wait "a little while longer" rather than move hastily, banking experts said. Finland, Tuomas Valimaki.
The ECB ended its fastest cycle of interest rate hikes in September and at the same time inflation is now slowing. Therefore, it is not surprising that the discussion on policy easing is gaining attention, even though investors and policymakers differ on the appropriate time to implement it.
Several major European countries will set wages in the coming months and the ECB's Chief Economist, Philip Lane, has said the ECB will have important data ahead of its June meeting, a sign that there will be no rate change until then.
Investors were speculating about a much faster rate cut and saw a 150 basis point rate cut in the 4% deposit rate, the highest in history, with the first move expected as early as March or April.
On the other side, ECB member and Bank of France Governor, Francois Villeroy de Galhau. also have the same view. According to him, although the next step of the European Central Bank (ECB) is likely to be a reduction in interest rates, he sees no need to rush it, and the ECB is ready to wait for the right time.
