Next ECB rate cut could be longer in coming, Holzmann says

On Saturday, ECB Governing Council member Robert Holzmann was quoted as saying, "I don't see any interest rate hikes at the moment. What could happen, though, is that one takes more time until the next interest rate cut," in an interview with the Austrian newspaper Kurier. Holzmann pointed out that the Euro zone annual inflation rose to 2.2% in November, up from 2.0% the previous month, surpassing the ECB's 2% target rate. He mentioned, "Yes, there are signs of an upward trend in some energy prices. But there are also other scenarios as to how inflation could return, like via a stronger devaluation of the euro." Holzmann, who heads the Austrian central bank, considering his stance as inflation-focused, also commented on the potential impact of U.S. President Donald Trump's trade tariffs on economic growth, price pressures, and monetary policy. He stated, "A likely scenario is that Trump's tariffs lead to an overall slowdown in growth, but also create inflationary pressure. More so in the U.S. than with us." Holzmann further added, "How strong the effect will be depends crucially on whether and how much the dollar appreciates and the euro depreciates."