European Central Bank (ECB) policymaker Bostjan Vasle indicated on Thursday that further interest rate cuts are on the table if the current economic baseline scenario remains intact.
Key Points:
Vasle suggested the possibility of additional rate cuts next year, contingent on the continuation of the disinflation process.
However, he cautioned that there is a risk the disinflation process could decelerate.
Despite these considerations, wage momentum remains relatively strong, presenting a mixed outlook for future monetary policy decisions.
Market Response:
The EUR/USD exchange rate is currently steady around the 1.0800 level. This stability reflects the market’s digestion of recent US inflation data and the Federal Reserve’s latest policy decision.
As the ECB navigates through these uncertain economic waters, Vasle’s comments underscore the delicate balance between fostering economic growth and managing inflationary pressures. The market will be closely watching for any signs of shifts in policy direction in the coming months.
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