Economist: Even if inflation falls further, a big rate cut is unlikely
the Chief Economist of the European Central Bank, Lane, said that although most factors indicate that inflation in the euro area will continue to decline, there are also other factors that could push inflation higher, including tensions between the EU and the US, and failed trade negotiations. When asked what this means for interest rate policy, Lane said: "We need to find a middle way." "If we see signs of further decline in inflation, we will respond with further interest rate cuts," he added. But the scope of the discussion is not so broad: no one is talking about a significant rate cut. "We are in a normal central bank policy area."
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