European Central Bank Governing Council member Kazaks (governor of Latvia’s central bank) spoke with MNI (gated) and Bloomberg (also gated). Via the Bloomberg report:
ECB shouldn’t switch to “autopilot” in cutting interest rates
- dependence on incoming economic data is “still key”
- “Wages-productivity-profit margins to watch carefully”
Kazaks says he is “fine” with current market pricing for 2 cuts this year:
- “As recession risks fade, barring a major surprise, the ‘insurance’ rate hike of September 2023 may now be reversed”
On divergence from Federal Reserve:
- “Large interest rate differntial might lead to EUR depreciation, but the disinflationary impact of rate hikes > inflationary impact of EUR depreciation”
This article was written by Eamonn Sheridan at www.forexlive.com. Source