In Frankfurt on Jan 30, three European Central Bank policymakers indicated to Reuters that an additional interest rate cut is expected to be smoothly approved in March before potential disagreements arise over further easing measures. Following the unanimous rate reduction for the fifth time on Thursday, policymakers reiterated their anticipation for inflation to stabilize at the 2% target this year amid ongoing economic fragility.
Insiders shared that there seems to be agreement among policymakers for another rate decrease to 2.5% at the ECB's upcoming March 6 meeting. However, they foresee a more in-depth discussion on subsequent cuts, hinting at a potential pause in April. Anonymously voicing their opinions, these policymakers noted that these topics have not yet been addressed by the Governing Council.
In response to inquiries, an ECB spokesperson declined to provide comments. ECB President Christine Lagarde clarified that Thursday's discussions did not touch upon the final rate target, indicating that the timing and scale of any future reduction will hinge on forthcoming data. She mentioned that the ECB's experts are set to release a revised projection on Feb. 7 for the "neutral" interest rate level that neither stimulates nor retards economic growth, currently estimated by the ECB at 1.75%-2.50%.