European Central Bank (ECB) board member Piero Cipollone has voiced support for further interest rate cuts, citing signs that inflation across the eurozone is easing faster than previously expected. His comments come amid ongoing discussions within the ECB over the appropriate pace of monetary policy adjustments following six rate cuts since June last year.
Cipollone pointed to several key factors behind the declining inflation trend. Falling energy prices, a stronger euro, and weakening global demand are all contributing to downward pressure on prices. He also warned that potential U.S. tariffs on European goods could further reduce external demand, increasing the case for more accommodative monetary policy to support domestic growth.
His remarks were echoed by Yannis Stournaras, Governor of the Bank of Greece and a fellow ECB policymaker, who recently suggested that current data supports a rate cut as early as April. While no formal decision has been made, Stournaras noted that all indicators are moving in favor of easing.
Market expectations appear to align with these views. Traders currently see a 60 percent chance of a rate cut in April, with a move by June fully priced in. Projections also suggest an additional cut by December, which would lower the ECB’s deposit rate to around 2 percent by the end of 2025.
The ECB is continuing to walk a fine line between stimulating economic growth and ensuring price stability. As inflation moderates and geopolitical pressures remain in flux, policymakers are weighing their next steps carefully. Any easing would mark a shift toward a more supportive monetary environment for the eurozone, aimed at sustaining recovery without reigniting inflation.
