Olli Rehn, a member of the European Central Bank's (ECB, Financial) Governing Council, indicated that eased inflation pressures and a deteriorating Eurozone economy support a rate cut this month. Recent statistics confirm the slowing of inflation, providing a rationale for additional rate cuts during the October meeting, according to the Bank of Finland Governor.
The previous day, ECB President Christine Lagarde expressed increased optimism about the bank's ability to control inflation, suggesting a growing consensus for a rate cut on October 17. Rehn reiterated the ECB’s reliance on data-driven decision-making, emphasizing the importance of thorough analysis before any decisions are made.
Despite the fact that the ECB has previously implemented rate cuts during meetings where new economic forecasts were released, the market sees over an 85% likelihood of a rate cut in this month's meeting, even without new forecasts. Rehn acknowledged the major obstacles to economic growth, stating that a so-called "soft landing" cannot yet be guaranteed and future monetary policy must consider these challenges without compromising price stability.
