FRANKFURT (Reuters) – A European Central Bank rate cut in June will not necessarily be followed by a cut at the next meeting, even if inflation falls towards its target, Bundesbank President Joachim Nagel said on Tuesday , during an interview given to several media.
“If the rates are lowered for the first time in June, this does not mean that we will lower the rates during the next Governing Council meetings. We are not on autopilot,” Joachim Nagel said in a joint interview. Les Echos, Handelsblatt, Corriere della Sera and El Mundo.
Joachim Nagel estimates that inflation would fluctuate around its current levels, i.e. 2.4% in April, for a few months before resuming its decline towards its target of 2%.
“There may be months when inflation rebounds slightly, as some prices tend to fluctuate, particularly energy prices. Overall, I expect inflation to continue to decline until “to our target of 2%, which it should reach in 2025”, reassured the head of monetary policy.
The President of the Bundesbank is also optimistic about the trajectory of wages in the euro zone, the main uncertainty this year for the ECB, Joachim Nagel estimating that the trends were well oriented and that no element suggested the existence of a spiral price-wages.
(Written by Balazs Koranyi, Corentin Chappron, edited by Kate Entringer)
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