ECB officials "Rate-cut cycle is nearly over"

JH Kim

Summary

ECB officials said the current rate-cut cycle has entered its final stages.
They said the likelihood of further rate cuts is not high, and monetary policy easing may be limited.
Markets are paying attention to the possibility that the ECB will hold interest rates going forward to assess policy effects.

Remarks have emerged within the European Central Bank (ECB) that the current rate-cut cycle has entered its final stage. It is suggested that the monetary policy easing phase is likely to be limited rather than prolonged.

On the 18th (local time), according to breaking economic news account Walter Bloomberg, ECB officials said in recent remarks that "the rate-cut cycle is almost over." This is interpreted as a signal that there is little room for further cuts.

The ECB has been gradually lowering its policy rate as it confirmed a slowdown in inflation. However, considering whether the price stability target will be achieved, service prices, wage growth, and so on, assessments say the policy space is limited.

Markets are paying attention to the possibility that the ECB will switch to a phase of holding rates at upcoming meetings to assess policy effects. Even if there are additional cuts, the prevailing view is that the pace and scope may be limited.