European Central Bank: Likelihood of October Rate Cut is Very Low
According to European Central Bank (ECB) board member Kestutis Simkus, the likelihood of a rate cut at the upcoming bank meeting in October is very low. His comments underscore the central bank's confidence that the current macroeconomic situation in the Eurozone does not require immediate actions in the form of easing monetary policy.
Simkus noted that the final decision on the rates will depend on fresh data regarding inflation and economic growth. However, in his opinion, current inflation forecasts remain above the target level, creating prerequisites for maintaining the existing rates at a level sufficiently high to control inflation.
Speculation in the financial markets about the possibility of rate cuts has become quite widespread, especially against the backdrop of slowing economic growth in the Eurozone. Nevertheless, Simkus made it clear that the ECB is not in a hurry to implement changes, rejecting intense market expectations.
Among analysts, there has also been discussion that any changes in monetary policy may occur only depending on how the economic situation evolves and what data comes in the coming months. Predictions emphasize that it may take more time to assess the impact of already made rate increases on the economy.
Earlier this month, the ECB also signaled a possibility of maintaining a "cautious approach" to monetary policy amid current economic realities. This aligns with Simkus's comments and adds confidence to investors that the central bank prefers a careful approach, which may include further monitoring incoming economic data before making any decisions.
In conclusion, as Simkus stated, the ECB stands guard over price stability and will make decisions based on related indicators. Investors will continue to keep an eye on upcoming economic data that may impact the internal opinion on the advisability of a rate cut.
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