The ECB should hold its key rate at 2% from the summer barring major shocks, Alfred Kammer, director of the European department at the IMF, told CNBC.
The European Central Bank should only enact one more quarter percentage point interest rate cut this year, the International Monetary Fund's Europe chief said Wednesday. "Our recommendation is there is room for one more 25 basis point cut, in the summer, and then the ECB should hold that 2% policy rate unless major shocks hit and there is a need for recalibrating monetary policy," Alfred Kammer, director of the European department at the IMF, told CNBC.
The ECB has reduced rates seven times in quarter point increments in its latest cycle, starting in June 2024.should only enact one more quarter percentage point interest rate cut this year despite wider risks to economic growth, the International Monetary Fund's Europe chief said Wednesday. "We have a very clear recommendation for the ECB, what we saw so far is a huge success in the disinflation effort and monetary policy has worked ... so we are expecting to sustainably hit the 2% inflation target in the second half of 2025," Alfred Kammer, director of the European department at the IMF, told CNBC's Carolin Roth. "Our recommendation is there is room for one more 25 basis point cut, in the summer, and then the ECB should hold that 2% policy rate unless major shocks hit and there is a need for recalibrating monetary policy," he added.The ECB has reduced rates seven times in quarter point increments in its latest cycle, starting in June 2024. Its mostthat the disinflation process in the euro zone was "nearing completion," though stressed that risks remained — particularly given the uncertain landscape in whichFor the euro area, Kammer said tariffs and trade tensions weighed more heavily on the outlook than were offset by recent developments on the fiscal side, including expectations for
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