OeNB boss Holzmann on ECB interest rates: “It's good”

For the Oesterreichische Nationalbank (OeNB) and ECB Council Governor Robert Holzmann, an interest rate change in the euro area could take place in June. “It's great,” Holzmann said Friday evening on ORF's “ZIB2.” Inflation has come down. “So, we can expect a rate cut, but it's not certain.”

To bring record inflation under control, the ECB raised interest rates ten consecutive times from July 2022 after years of zero interest rate policy. Last Thursday, the central bank kept the key interest rate unchanged at 4.5 percent for the fifth time in a row. ECB boss Christine Lagarde hinted at an interest rate hike in June in mid-March and has now strengthened signals. “We will have a lot of data and new forecasts in June,” Lagarde said following the ECB Governing Council meeting in Frankfurt on Thursday. It will then determine whether the council's expectations have been met.

Central banker Holzmann cautioned against high expectations. “You have to be very careful. The last mile is very difficult. That's why we don't want to promise more,” he said in an interview on “ZIB2” television. Key interest rates may be cut by 0.25 or 0.5 percentage points, depending on price and wage dynamics through June and the development of future price expectations.

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