ECB Officials Call for Lower Interest Rates

European Central Bank (ECB) officials are signaling a shift towards reducing interest rates further to support the sluggish eurozone economy. ECB Vice President Luis de Guindos emphasized the need for caution amidst uncertainties such as rising trade tensions and global conflicts. Meanwhile, ECB Governing Council member Fabio Panetta called for a more forward-looking approach, suggesting that rates should move to neutral or even expansionary territory to avoid constraining growth. He noted that restrictive conditions are unnecessary with inflation stabilizing around 2% and domestic demand weak. The ECB is expected to announce further rate cuts in December, with discussions around easing continuing into 2025. Policymakers are wary of the potential impacts from external factors, including changes in the US government and trade tariffs, on inflation forecasts.