European Central Bank May Implement Three More Rate Cuts This Year

According to Odaily, European Central Bank (ECB) Governing Council member Vujcic has indicated that the ECB might implement three more interest rate cuts this year. This comes even as the U.S. Federal Reserve slows its pace of rate reductions. The continuation of the ECB's easing policy is contingent upon a rapid decline in core inflation. Since June of last year, the ECB has reduced borrowing costs five times and has signaled further policy easing, prompting investor speculation about the speed and extent of future rate cuts. Vujcic stated, "The market expects three more rate cuts this year. These expectations are not unreasonable." However, he emphasized that data in the coming months will be crucial, as forecasts suggest a significant drop in inflation within the services sector. This sector represents the largest single component of the consumer price basket and has been a major driver of excessive price growth over the past year. "For rate cuts to materialize, we need to see a slowdown in core inflation and services inflation," Vujcic, who is considered a moderate hawk, remarked.