Bundesbank President Open to Interest Rate Cut

BERLIN (Reuters) – Bundesbank President Joachim Nagel is open to considering another European Central Bank interest rate cut at its meeting next week, he told Table Media, adding that German economic growth in the second half would be weaker than expected.

The ECB has already cut rates twice this year from record highs and markets now expect quicker policy easing, with anticipated moves in October and December fully priced in as inflationary pressures ease faster than policymakers had expected.

"I am certainly open to considering whether we could possibly make another interest rate cut," Nagel stated, noting the ECB's interest rate policy has effectively dampened prices to date.

Nagel highlighted the positive inflation trend, saying, "We are clearly approaching our target of 2%."

Separately, the Bundesbank chief agreed with the German government's revision of its forecast for output in Europe’s largest economy this year, projecting a contraction of 0.2% instead of a previous forecast of 0.3% growth.

He also shared the chancellor's skepticism regarding EU tariffs on Chinese car imports, stating, "Tariffs and mutual protectionism – that cannot be in Europe's interest. I am clearly in favor of talks and negotiations with China."