ECB Policymaker Advocates for Rate Cuts

European Central Bank (ECB) policymaker Yannis Stournaras supports two interest rate cuts this year, anticipating further easing in 2025 as inflation decreases. In an interview with the Financial Times, he stated:

> "Even if we have one cut of 25 basis points now and another one in December, we will be back to just 3 percent — still in highly restrictive territory."

Stournaras, who is also the governor of Greece's central bank, indicated that inflation might reach the ECB's 2% target in the first half of 2025, making it easier for policymakers to lower these restrictive interest rates sooner than expected. He noted that inflation is declining faster than the ECB's September forecast.

The ECB has already implemented two interest rate cuts this year, and a further reduction in October and December seems largely anticipated by investors, driven by weak economic growth and faster inflation easing.

Stournaras remarked, "If inflation continues the downward path towards the 2 percent target, why not cut in every meeting?"

Recently, ECB President Christine Lagarde suggested that an October rate cut is likely. Many policymakers have indicated support for a rate cut on October 17, suggesting that the decision may be straightforward, with the primary focus shifting to actions in December.