Particle.news
Download on the App Store
4 ARTICLES
·
6d ago

ECB’s Isabel Schnabel Flags High Bar for Further Rate Cuts

Stable inflation at the ECB’s 2 percent target coupled with tariff uncertainties means additional cuts will be difficult to justify, Schnabel says.

Image

Overview

  • Isabel Schnabel said that interest rates are in a “good range” and that the threshold for any further reductions is very high.
  • Eurozone inflation eased to 2.0 percent in June, matching the ECB’s medium-term objective, according to Eurostat.
  • Since summer 2024 the ECB has enacted eight consecutive rate cuts, bringing its key deposit rate to 2.0 percent.
  • Schnabel warned that U.S. tariffs could dampen economic activity and trigger cost shocks and supply-chain disruptions that complicate the inflation outlook.
  • Most economists now expect the ECB to hold rates steady at its July 24 meeting even as cheaper loans support growth and savers face lower returns.