European Central Bank (ECB) policymaker Martins Kazaks stated on Friday that he does not see a justification for interest rates to fall below neutral levels. He emphasized that the ECB should not consider such a scenario unless there is a significant deterioration in economic conditions and a substantial undershooting of the inflation target.
Key Quotes from Kazaks:
Rate Outlook: “I don’t see a case for rates to fall below neutral.”
Economic Conditions: “That would require weaker baseline and substantial undershooting of the inflation target.”
Policy Consideration: “There is no need for the ECB to contemplate such a scenario.”
Market Reaction
Despite these comments, the Euro has not shown much strength, with the EUR/USD pair slipping 0.09% to trade around 1.0815 at the time of reporting. This muted response suggests that traders remain cautious about the Euro’s outlook, possibly reflecting ongoing concerns over economic growth in the Eurozone and the ECB’s policy stance.
Related Topics:
- Is the ECB Still Buying Corporate Bonds?
- What is the ECB Bond Buying Program?
- What is the ECB Balance Sheet?
