ECB Plans Further Rate Cuts Amid Economic Challenges

The European Central Bank (ECB) is preparing to provide key insights into future euro-zone interest rate adjustments, with fresh estimates for the neutral rate expected soon. ECB officials, including Mario Centeno, have indicated a possibility of slashing rates below the neutral level, currently at 2.75%, to stimulate economic growth amid declining inflation and external pressures such as U.S. tariffs. There is a strong consensus among policymakers for a quarter-point reduction in the upcoming March meeting, with markets pricing in a nearly certain cut. Slovak policymaker Peter Kazimir noted the need for flexibility and caution, emphasizing the importance of monitoring inflation trends and economic indicators. While another rate cut is anticipated, Kazimir warned against expecting a clear long-term strategy due to high uncertainty in the economic landscape. Overall, the ECB is navigating complex challenges and considering further easing measures to support the euro-zone economy.