(Bloomberg) — European Central Bank Governing Council member Yannis Stournaras said a total of four interest rate cuts is feasible in 2024, for a reduction of 100 basis points by year-end.
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“If inflation develops in line with our March forecast and if this trend continues until the end of the year, I believe that this year we will have reductions in key interest rates from the ECB,” Stournaras said in an interview with the Proto Thema Sunday newspaper.
“Personally I think the reduction of interest rates by four times this year, by 25 basis points each time, is possible,” he said.
The views of Stournaras, who falls on the dovish side of the ECB’s policy spectrum, haven’t been fully echoed so far by other Governing Council members.
“This is not yet a unified view,” said Stournaras, who heads Greece’s central bank. “Some colleagues are more cautious and believe that interest rate cuts should be more moderate.”
Recent inflation data from France and Italy has supported the argument that the central bank should start cutting rates sooner rather than later.
As the consumer price index dips closer to the ECB’s 2% target, most policymakers have backed President Christine Lagarde’s signal that the first interest-rate cut will come in June.
“The differences of opinion within the Governing Council of the ECB are much smaller than the image in the media,” Stournaras told Proto Thema.
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