ECB Governing Council member Gediminas Simkus forecasted three 25bps rate cuts for this year, with a potential for a fourth. “I see a higher than 50% chance there will be more than three cuts this year,” he told reporters.
Simkus also highlighted that the ECB might not stop at just one rate cut in June, stating, “I see a higher than zero chance that an interest rate cut may follow also in July. The July decision will be important in setting the trajectory.”
Regarding the pace and magnitude of these rate cuts, Simkus emphasized a cautious approach. He remarked that there is “no urgency to cut rates” by more than 25bps at a time, indicating he preference for gradual adjustments rather than larger, more aggressive cuts.
