ECB's Olli Rehn Discusses Future Rate Cuts

Olli Rehn, a member of the European Central Bank (ECB) Governing Council, indicated that the ECB is poised to reduce interest rates, contingent on the inflation outlook, underlying inflation trends, and the effectiveness of monetary policy transmission. He suggested that the deposit rate, currently at 3.25%, could be lowered to a neutral level by late winter or early spring of 2025 if economic data supports this move. While he emphasized that the direction of monetary policy is clear, he also noted that the speed and scope of any cuts will be evaluated at each meeting. Euro area growth remains sluggish, and the potential for further disinflation could bolster the case for rate cuts. However, Rehn warned against the risks of trade wars impacting the economic outlook.