Bundesbank President Cautions ECB on Rate Cuts

European Central Bank officials, including Bundesbank President Joachim Nagel and Governing Council member Pierre Wunsch, have cautioned against rushing into interest rate cuts despite signs of economic weakening in the eurozone. Nagel emphasized the importance of waiting for new data, including upcoming inflation statistics and projections, before making decisions at the ECB's December meeting. Markets currently anticipate a 25 basis point rate cut, with a 40% chance of a larger 50 basis point reduction, influenced by recent dovish comments. Wunsch echoed these sentiments, labeling discussions of a half-point cut as premature, and underscored the need for a careful assessment of economic developments. Both officials advocate for a flexible approach while remaining vigilant against inflation.