The European Central Bank (ECB) is keeping its options open for its final meeting of 2024, with Governing Council member Peter Kazimir signaling that more rate cuts are possible. Kazimir emphasized that disinflation is on “solid footing” but indicated that further steps will depend on the latest economic data.
“Our decision to lower rates in October leaves the December meeting wide open,” Kazimir said in an op-ed on Monday. “All options remain on the table.”
The ECB reduced interest rates for the third time this year last week, a move driven by a faster-than-expected decline in inflation. This decision allows the ECB to provide additional support to the region’s struggling economy. While officials have not indicated the exact timing or extent of future rate cuts, investors are expecting a series of reductions in the months ahead.
Lithuania’s Gediminas Simkus and Latvia’s Martins Kazaks both indicated that borrowing costs will continue to fall if inflation remains on a downward trajectory.
“The direction is clear — less restrictive monetary policy,” Simkus told reporters in Vilnius. “I can’t yet tell what the decision will be in December, but the direction is clear — down.”
Kazimir added that if new data and forecasts confirm the recent acceleration in disinflation, the ECB would be in a “strong and comfortable” position to maintain its easing cycle. However, he emphasized that the bank will remain flexible and prepared to adjust its approach as needed.
To fully declare victory over inflation, Kazimir said more evidence is needed of slowing service prices and wage increases.
“I’m increasingly confident that the disinflation path is on solid footing,” Kazimir stated. “But the Doubting Thomas in me still needs to see further proof of a sustainable return to target.”
