In Europe the noise continues from the European Central Bank, where we ended last week with statements by Villeroy (neutral ECB) in which he stated that he is “more confident” regarding the downward trend in inflation. According to the governor of the Bank of France, unless there is a surprise, the first rate cut should be in June and this action “should be followed by other cuts before the end of the year.”
Meanwhile, Robert Holzman, hawkish member of the ECB and governor of the Austrian National Bank, stated that the June cut is probable but not certain and that the pace of future decisions will depend on the evolution of inflation and wages.
After the war between Israel and Iran, Simkus, a member of the Governing Council of the ECB, defended yesterday that there is a greater than 50% probability that there will be more than three rate cuts this year. He also noted that geopolitical disruptions, such as an escalation of the conflict between Israel and Iran, could cause the first rate cut to be delayed from June to July.
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Economic News, ECB
