Finance
Key ECB dove makes case for more easing, others more cautious
Published by Global Banking & Finance Review®
Posted on March 24, 2025
3 min readLast updated: January 24, 2026
Global Banking & Finance Review®
Company
Published by Global Banking & Finance Review®
Posted on March 24, 2025
3 min readLast updated: January 24, 2026
ECB's Cipollone suggests more rate cuts due to faster-than-expected inflation decline, while others urge caution amid global uncertainties.
MADRID/DUBLIN (Reuters) -The case for another European Central Bank interest rate cut is strengthening, ECB board member Piero Cipollone said on Monday, even if others on the rate-setting Governing Council remained more cautious.
The ECB has cut interest rates six times since last June but provided few signals about its next move after the most recent reduction at its March meeting, arguing that uncertainty is simply too high for the bank to guide markets.
Economic conditions have shifted since that meeting, however, Cipollone argued, and inflation may be coming down quicker than expected.
"Key issues have arisen that have strengthened the arguments in favour of continuing to lower rates," he said in an interview with Spanish newspaper Expansion. "We are likely to reach our inflation objective sooner than our latest projections indicate."
"If the path and our narrative are confirmed, from my perspective there is room to relax our monetary policy further," he said.
Greek central bank chief Yannis Stournaras made a similar argument on Friday, arguing that everything was pointing in the direction of a cut in April.
But Ireland's Gabriel Makhlouf, considered a centrist on the 26-person Governing Council, took a more measured view, arguing that exceptional uncertainty required caution.
"We do need to be cautious about changes to our monetary policy stance where we're not yet at (inflation) target, and when quite exceptional events are happening around the world which could have a direct effect on inflation,” Makhlouf told reporters in Dublin.
Still, he argued that inflation was moving in the right direction and he was not too worried about the precise timing of hitting the target.
Cipollone said that energy prices have fallen significantly since the March 6 meeting, the euro has appreciated and real rates have increased, all contributing to a faster drop in inflation.
"And if the United States were to impose tariffs on European exports, that would have a negative impact on demand, which would further strengthen the downward trend in inflation," he said. "Trade tensions between China and the United States could lead to China redirecting its products to the European market, increasing the downward pressure on prices."
Financial markets see a roughly 60% chance of a rate cut in April but a move by June is fully priced in. Investors then see another cut, probably in December, taking the ECB's deposit rate to 2% by the close of 2025.
(Reporting by Inti Landauro and Padraic Halpin; Writing by Balazs Koranyi; Editing by David Goodman, Toby Chopra and Hugh Lawson)
The main topic is the potential for further interest rate cuts by the European Central Bank amid changing economic conditions.
Arguments for a rate cut include faster-than-expected inflation decline and favorable economic conditions.
Ireland's Gabriel Makhlouf is advocating for caution due to exceptional global uncertainties.
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