(Bloomberg) -- The European Central Bank is on course to lower interest rates at its June meeting, according to Vice President Luis de Guindos.

“If things move in the same direction as they have in recent weeks, we will loosen our restrictive monetary policy stance in June,” he told Le Monde in an interview published Tuesday. “Assuming there are no surprises between now and then, as you say in French, it’s a ‘fait accompli’.”

Guindos’s comments are in line with the general consensus on the start of easing. What happens after June is more controversial, with the vice president citing services inflation, stronger US price pressures, the geopolitical situation and its potential impact on oil as risks.

“The level of uncertainty makes it very difficult to say,” he said, according to a transcript on the ECB website. “I already mentioned June. As for what happens afterwards, I’m inclined to be very cautious.”

Guindos also said:

  • “Unit labor costs are still increasing. But I think we’re going in the right direction and will see some gains in productivity.”
  • “What the Federal Reserve decides is crucial not only for the United States, but also for the global economy, which also affects the euro area.”
  • “The euro-US dollar exchange rate could be one of the channels through which there is an impact. We don’t have an exchange rate target, but we need to take the impact of exchange rate movements into account.”
  • “The leading indicators in Europe point to a modest recovery in the second half of 2024. But we will have a growth rate of less than 1%, below our potential, which is a very low outcome.”

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