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European Central Bank (ECB) executive board member Piero Cipollone said the time is right for an interest rate cut in June, echoing comments a day earlier from Governing Council member Fabio Panetta.
“I expect a first move to reduce rates at the next ECB meeting, then we will have to discuss, we will see, we will be data dependent,” Cipollone said on Sunday (May 26) at the Economy Festival event arranged by Il Sole 24 Ore in Trento, Italy.
“Recent data goes in this direction and strengthens our certainty that we will be able to reduce the restrictive stance of our monetary policy,” he added.
A lowering of borrowing costs by the ECB in June has been widely telegraphed. Most officials have stayed silent on what happens after that, although hawkish policymakers including Joachim Nagel and Isabel Schnabel have already said they don’t want another move in July.
Cipollone’s remarks echoed the Bank of Italy governor’s comments, made on Saturday on the sidelines of Group of Seven (G7) finance ministers and central bankers’ meeting in Stresa, when Panetta said that there are conditions for a change in monetary policy at the Jun 6 meeting.
“We have our mantra of deciding meeting by meeting, but I do believe that the consensus has widened and that even those who had more doubts are coming round” to agreement on a reduction, Panetta said.
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Asked whether G7 officials discussed the state of lenders at the current juncture, Panetta said that “what we see today in Italy and Europe is a healthy banking system with good capitalisation”. BLOOMBERG
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