ECB Executive Board Member Panetta: There is no need to hold back on interest rate cuts

ChainCatcher news, according to Jinshi reports, ECB Executive Board member Panetta stated that there is no need to hold back on interest rate cuts. With the 2% price target within reach and inflation risks declining, there is no need to delay rate cuts.

Panetta said on Saturday: "Monetary policy continues to exert downward pressure on economic activity and inflation. Given that inflation is close to the target and domestic demand remains weak, this impact is increasingly unnecessary. A less decisive easing of monetary policy could lead to mid-term inflation being too low." Panetta also mentioned that borrowing costs are approaching the neutral interest rate, a level that neither restricts nor stimulates the economy. He believes that the downside risks to inflation outweigh the upside risks.

The tariffs imposed by the U.S. on European exports may have little impact on Eurozone inflation, with the main risk still being a mid-term inflation rate falling below 2%. He also called for policy decisions to be "supported by communication focused on the real economy and mid-term inflation outlook." Panetta believes that the main threat to price trends comes from the energy market. In the context of increased volatility, energy market prices, especially natural gas prices, are rising and need to be closely monitored.