During a meeting in early June, the two key leaders of the European Central Bank (ECB) both indicated that they were considering reducing interest rates. Olli Rehn, a member of the ECB board of governors, highlighted in a speech on May 27 that inflation in the euro area is decreasing sustainably. In April, inflation in the eurozone remained steady at 2.4%, marking the 7th consecutive month that this index fell below 3%. May’s inflation figures are expected to be announced this week. Rehn stated that thanks to the decline in inflation, the figure has reached the 2% target, making June an opportune time to ease monetary policy.
Meanwhile, ECB economist Philip Lane echoed Rehn’s sentiments when he spoke to the Financial Times, stating that the current situation is appropriate for lifting restrictions. The comments from both Rehn and Lane come ahead of the ECB policy meeting scheduled for June 6. Market expectations are leaning towards a 25 basis point reduction in the reference interest rate, which currently stands at 4%.
The possibility of the ECB reducing interest rates has led to a contrast with