(Bloomberg) -- European Central Bank Governing Council member Pierre Wunsch cautioned against interest rates being lowered too quickly and said he’s undecided on a widely expected cut this month, according to Belgium’s L’Echo.
Trends in the euro-zone economy and inflation “motivate measured and prudent rate cuts,” the Belgian central-bank head told the newspaper in an interview. “But is there a determining factor that means that we should open the discussion in October? I would really like to see the analysis that the central bank staff makes of it.”
- “If we lower rates too quickly and then have to go back in the other direction, it is more complicated to communicate than if we are a little too slow and have to, at some point, accelerate”
- Cites Middle East tensions as grounds for caution
- “Let’s imagine that oil prices continue to rise: If, at that time, we communicated to the markets an acceleration in the rate cut, we would be taking a risk”
- “On the other hand, we have a weaker economy, but, for me, it is not clear that this changes our judgment implying a gradual decrease in rates, in an environment going in the right direction”
- NOTE: Click here to read full interview
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