ECB's Centeno: May need to go below neutral to sustain inflation

Joshua Gibson FXStreet

European Central Bank (ECB) Governing Board Member Mario Centeno noted that deflationary pressures within the European economy are becoming a concern for policymakers. Dropping interest rates below neutral in order to stimulate the economy may be necessary, according to Centeno.

Key highlights

Undershooting 2% inflation is a risk if investment doesn't pick up.

We may need to go below neutral rate to sustain inflation at 2%.

Pretty clear, we need to keep downward trajectory of interest rates.

I'm ok with gradual rate cuts of 25 bps.

Europe must be united in face of potential tariffs; I see negotiations ahead.

Author

Joshua Gibson

FXStreet

Joshua joins the FXStreet team as an Economics and Finance double major from Vancouver Island University with twelve years' experience as an independent trader focusing on technical analysis.

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