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ECB’s Šimkus Signals Possible Rate Cut Amid Rising Inflation Risks

by Elena

European Central Bank Governing Council member Gediminas Šimkus warned on Tuesday that the risks of inflation falling below the ECB’s target have intensified.

Šimkus indicated potential for an interest rate cut as early as June, citing downside risks to inflation driven by ongoing trade tensions with the United States and a stronger euro. He also noted that current borrowing costs are at the higher end of the neutral range, suggesting limited room for further tightening.

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The euro responded to these remarks by weakening, with the EUR/USD pair slipping 0.40% to 1.1339.

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