Moderating inflation opens door for another ECB rate cut, says Spanish minister
2024.07.26 07:43
By Marcela Ayres
RIO DE JANEIRO (Reuters) – An easing of inflation data is opening the door to another rate cut by the European Central Bank, Spanish Economy Minister Carlos Cuerpo said in an interview on the sidelines of a G20 finance meeting in Brazil.
The ECB held interest rates steady last week but signaled that September’s meeting would be “wide open” as it downgraded its view of the euro zone’s economic prospects.
“The ECB has been saying that they’re very data-dependent, but so far, the data looks good in the sense that inflation is moderating,” Cuerpo said in the Thursday interview.
“So that looks good for the European Central Bank to continue on a downward path.”
Asked if the outcome of the November U.S. election could bring inflationary pressure or alter ECB policies, he pointed to the need to look at what the Federal Reserve is doing about inflation, which was “a bit stickier” in the United States.
Nonetheless, Cuerpo stressed that financial markets are expecting lower interest rates to provide some upside for European economies.
“And this is how we interpret it as well,” he added.
After participating in a G20 session addressing economic challenges, he said that the main risks included an escalation of conflict in the Middle East and disruption to supply chains.
On the domestic front, Cuerpo said there is no rush amid ongoing negotiations for Spain’s ruling party to choose the central bank chief and the opposition to present a deputy.
“That’s a tradition we want to uphold. These negotiations take time. And so we should not rush.”
Cuerpo added that Margarita Delgado’s mandate as deputy governor ends in September, and new appointments would follow that time frame.
