ECB Vice President hinted that interest rate cuts would be further emphasized that interest rate paths are difficult to determine due to “huge uncertainty”

The Zhitong Finance App learned that ECB Vice President Louis de Guindos recently revealed that if the inflation forecast comes true, the ECB will cut interest rates further. He pointed out that the future trajectory of interest rate cuts will closely follow the development of inflation, although it is difficult to predict the exact number and extent of interest rate cuts. The ECB has cut interest rates three times and plans to lower deposit interest rates to 3% again at next month's policy meeting, but most officials say there is great uncertainty about the future policy path.

Degindos stressed that there is a clear trend of monetary policy relaxation aimed at dealing with challenges such as inflation approaching targets and weak economic prospects in the Eurozone. He pointed out that this is one of the main risks currently faced. Furthermore, he expressed concern over trade tariffs that could result from Donald Trump's re-election, warning that this could trigger a trade war and adversely affect the global economy.

It is worth mentioning that ECB chief economist Philip Lane, Bundesbank President Joachim Nagel, and Bank of Ireland Governor Gabriel Machloof also held similar views and called on policymakers to keep an open mind about the cost path of borrowing.

At next month's policy meeting, the ECB will once again review the economic situation and make corresponding decisions to address current economic challenges.