MILAN/FRANKFURT (Reuters) – The European Central Bank (ECB) will have key data by June to decide on the first of a likely series of interest rate cuts, ECB chief economist Philip Lane said , in an interview published on Saturday, where he also specifies that moving too quickly in this matter could prove counterproductive.
“By our June meeting we will have had this important data,” Philip Lane told Corriere della Sera. “But let me emphasize that we have other data that we will look at every week.”
“A deceptive dawn, a too rapid recalibration, can be self-destructive,” he added.
With inflation in the euro zone now appearing to be under control, investors are betting on an easing of rates, perhaps as early as March. Money markets are currently anticipating a cut of 150 basis points over the whole year, which would bring the ECB’s main key rate down from 4%, a historically high level, to 2.5%. Philip Lane openly discusses the the idea of a “sequence of rate cuts”, while emphasizing that the crucial data on wage developments will only be fully available for the ECB meeting on June 6.
(Giulio Piovaccari in Milan and Francesco Canepa in Frankfurt, Gilles Guillaume for the French version)
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