Monetary policy
ECB director provides the end of interest rate cuts
The European Central Bank has reduced the deposit interest for banks and savers five times since summer. Now ECB director Schnabel advocates reluctance. The stock exchanges react promptly.
ECB director Isabel Schnabel promises a possible end to the latest series of interest cuts by the central bank. “We are approaching the point where we may have to pause or stop at the interest rate cuts,” said Schnabel of the “Financial Times”. She does not know what will happen at the next ECB sessions. “But we have to start this discussion.”
Schnabel is the most prominent voice in the European Central Bank (ECB), which pleads for a debate about a possible stop of the interest reductions. On the stock exchange, the statements along with concerns about new US tariffs on cars ensured that the leading index Dax ended its latest record run and gave up significantly on Wednesday.
Next interest reduction awaited in March
At the financial markets, the ECB is expected to reduce the key interest rates by 0.25 percentage points for the sixth time since last summer. The deposit rate that is important for banks and savers is currently 2.75 percent.
How it goes on is open. The financial markets would also no longer be fully priced in an interest rate reduction at the next one in April, said Schnabel.
“We can no longer say with certainty that our monetary policy is still restrictive,” she said. A restrictive monetary policy dampens economic development. Schnabel wants to continue to meet from meetings. The ECB always explained that.
dpa
Source: Stern
