Kazaks of ECB mentions gradual rate cuts as 'base scenario'
In an interview with Latvia's public broadcaster on Tuesday, ECB Governing Council member Martins Kazaks stated that the European Central Bank (ECB) should continue to gradually reduce interest rates, as reported by Bloomberg.
TroibNews 
According to ECB Governing Council member Martins Kazaks, the European Central Bank should continue to gradually cut interest rates. His remarks were made during an interview with Latvia's public broadcaster on Tuesday, as reported by Bloomberg.
"The base scenario at the current moment – and to my mind the one that is the most appropriate – is to continue to lower rates step by step," Kazaks stated.
These comments followed the ECB's announcement of a 25 basis point reduction in key interest rates for October. The interest rate on benchmark deposit facilities was lowered to 3.25 percent, while the rate on main refinancing operations fell to 3.4 percent, and the marginal lending facilities rate decreased to 3.65 percent.
In October, the eurozone's inflation rate reached 2 percent, driven by rising food and service prices, according to Eurostat's estimates. This figure was an increase from September's 1.7 percent, marking the lowest level since April 2021.
The ECB projected that inflation would rise in the coming months before returning to the central bank's target of 2 percent by 2025.
As the implications of last week's US election results are analyzed globally, European officials are expressing concerns about the potential for a more protectionist US under a possible Donald Trump administration.
Kazaks noted that the future remains uncertain and emphasized the need for Europe to steer clear of escalating any trade conflicts. He further articulated that tariffs would not benefit Europe due to its export-oriented economy and foreign trade reliance, suggesting that such measures could contribute to rising inflation and an impaired economy.
Olivia Brown for TROIB News
"The base scenario at the current moment – and to my mind the one that is the most appropriate – is to continue to lower rates step by step," Kazaks stated.
These comments followed the ECB's announcement of a 25 basis point reduction in key interest rates for October. The interest rate on benchmark deposit facilities was lowered to 3.25 percent, while the rate on main refinancing operations fell to 3.4 percent, and the marginal lending facilities rate decreased to 3.65 percent.
In October, the eurozone's inflation rate reached 2 percent, driven by rising food and service prices, according to Eurostat's estimates. This figure was an increase from September's 1.7 percent, marking the lowest level since April 2021.
The ECB projected that inflation would rise in the coming months before returning to the central bank's target of 2 percent by 2025.
As the implications of last week's US election results are analyzed globally, European officials are expressing concerns about the potential for a more protectionist US under a possible Donald Trump administration.
Kazaks noted that the future remains uncertain and emphasized the need for Europe to steer clear of escalating any trade conflicts. He further articulated that tariffs would not benefit Europe due to its export-oriented economy and foreign trade reliance, suggesting that such measures could contribute to rising inflation and an impaired economy.
Olivia Brown for TROIB News
