ECB Policymaker Yannis Stournaras Backs Interest Rate Cuts Amid Declining Inflation
Yannis Stournaras, a key European Central Bank (ECB) policymaker, supports two interest rate cuts before the end of the year and anticipates further monetary easing in 2025. In an interview with the Financial Times, he highlighted that inflation is trending downward, reinforcing the case for reducing the ECB's main policy rate.
“Even with a 25 basis point cut now and another in December, the ECB's main interest rate would still be at 3% — a highly restrictive level,” stated Stournaras, who also serves as the governor of the Greek central bank.
ECB Interest Rate Cuts Expected to Continue
Stournaras predicted that inflation could meet the ECB's 2% target by mid-2025, supporting quicker interest rate cuts than previously forecast. He added that inflation is falling faster than the European Central Bank anticipated in its September projections, which strengthens the argument for additional cuts.
The ECB has already implemented two interest rate cuts this year, and the market is pricing in further reductions in both October and December. This signals that investors are factoring in slower economic growth and a faster-than-expected decrease in inflationary pressures.
Strategic Interest Rate Reductions in Focus
“If inflation continues its downward trajectory towards the 2% target, there’s no reason not to consider cutting rates at every meeting,” Stournaras told the Financial Times.
ECB President Christine Lagarde recently hinted at a possible rate cut in October, further fueling expectations. Several policymakers have voiced support for the cut, which is expected on October 17, while only a few members of the 26-member Governing Council have expressed concerns. The primary debate now centers on the next steps in December.


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