Latvian central bank governor, and therefore a Governing Council member of the European Central Bank, Martins Kazaks. Comments reported via Bloomberg.
Bloomberg is gated, but in brief, Kazak’s main points were:
- US tariff policies may slow down inflation and cause a recession
- But developments are head are unclear right now
- “If inflation were to undershoot the target significantly and for an extended period of time, the natural choice would be to lower interest rates into stimulus territory. Currently it is not the case.”
- “We are at 2.25% — the question is more about whether we will have to go much lower below 2%. We’ll do it if we have to, but the economic picture would have to become much weaker for that to happen and to weigh down on inflation further.”
Earlier:
Adam posted over the weekend:
This article was written by Eamonn Sheridan at www.forexlive.com.