Latest news with #MartinsKazaks
Reuters
4 days ago
- Business
- Reuters
ECB's Kazaks calls time on rate-cut streak
FRANKFURT, June 6 (Reuters) - The European Central Bank should stop cutting interest rates at every meeting and instead keep its powder dry given an uncertain economic outlook, ECB policymaker Martins Kazaks told Reuters. The ECB cut rates for the seventh time in a row on Thursday to prop up a euro zone economy that was struggling even before erratic U.S. economic and trade policies dealt it further blows. Kazaks called time on that year-long easing cycle, saying the ECB should keep "policy space" to cut rates again at a later date if needed. "I don't think the market should expect the trajectory of cutting rates at every meeting to continue," he said in a phone interview. "There is no need and there is value in maintaining policy space." Most ECB policymakers back keeping interest rates, now at 2%, on hold at their next gathering in July, or possibly longer, depending in part on the prospects for trade with the United States, sources told Reuters. Kazaks also supported a possible pause but warned against making any firm commitment - of "forward guidance" in central bank parlance - given an ever-changing political landscape. "We don't get much data between now and the July meeting so it may well be the case that we pause," Kazaks said. "But uncertainty remains very high, the political situation may change every day. So forward guidance isn't your friend in these circumstances." Even if the ECB were to cut rates further, this would amount to small, "fine-tuning" moves for as long as inflation was projected to stay at 2% over the medium term, Kazaks said. "In terms of the rate cutting, we've done a lot," he said. "If there are further cuts, they will be fine-tuning, unless we shift out of the baseline scenario." The ECB published new projections on Thursday that see inflation at 2% this year, 1.6% in 2026 and 2% in 2027. Kazaks welcomed the new forecasts but warned the dip next year, which the ECB chalked up to a stronger euro and cheaper fuel, called for vigilance. "We are in a good place, we have delivered inflation at 2%, but it's important to maintain it at around 2%," he said. "The staff forecast expects inflation to remain below 2% for some time so we have to remain vigilant and see what happens in the economy."
Bloomberg
21-05-2025
- Business
- Bloomberg
ECB Will Soon Reach Terminal Rate If Baseline Holds, Kazaks Says
European Central Bank Governing Council member Martins Kazaks said interest-rate cuts are nearing an end, assuming the base case for inflation stabilizing at 2% over the coming months comes to pass. 'If the current baseline holds, we will soon reach the terminal rate,' the Latvian official said Wednesday in a presentation for an MNI event. 'Nevertheless, it may be the case that, although most likely, the baseline probability is below 50%.'
RTÉ News
16-05-2025
- Business
- RTÉ News
ECB may be nearing end of rate cuts but trade war is a risk, policymaker says
European Central Bank interest rates may be close to bottoming out but uncertainty was high and the environment was prone to sudden changes that could also alter the policy outlook, ECB policymaker Martins Kazaks said today. The ECB has been cutting interest rates quickly over the past year and the debate over where to end the easing cycle is starting to gain prominence as the ECB's "baseline" forecast sees inflation settling around the 2% level. "We are, by and large, within the baseline scenario," Kazaks told CNBC. "And if the baseline scenario holds, then I think we are relatively close to the terminal rate already," he said. "A couple of more cuts may be (possible), but the important thing is to see where the trade talk and the trade story take us, and then of course we'll act," he added. ECB board member Isabel Schnabel has already argued for steady rates while French policymaker Francois Villeroy de Galhau said he saw room for more easing. Markets now see a roughly 90% chance of an ECB rate cut on June 5 but then price only one more easing over the rest of year, suggesting that the ECB's deposit rate could bottom out at 1.75%. An escalation in the global trade war is a key risk but Mr Villeroy said the ECB would not use interest rates to influence the value of the euro, turning a trade war into a currency war. "Unfortunately, there is a risk of trade war, but a currency war would be a situation where each country is actively using its interest rates to try and gain an economic advantage. We are not at that point right now," Mr Villeroy, who also heads the Bank of France, told regional French newspapers in an interview published today.
Bloomberg
12-05-2025
- Business
- Bloomberg
ECB's Kazaks See Reason for Another Rate Cut, But Urges Caution
European Central Bank Governing Council member Martins Kazaks urged for caution even as he backed a further reduction in borrowing costs. 'The next monetary policy meeting is at the beginning of June and there will be new data and then we will see,' he said. 'The financial markets at the moment are expecting another rate cut in June. While looking at today's data, that is a pretty possible step.'
Bloomberg
29-04-2025
- Business
- Bloomberg
ECB's Kazaks Hopeful That Step-by-Step Rate Cuts May Continue
The European Central Bank should be able to carry on with gradual interest-rate reductions, according to Governing Council member Martins Kazaks. 'At the moment financial markets are expecting that rates will be lowered a few more times,' the Latvian central bank chief told public broadcaster LTV on Tuesday. 'It will all be dependent on what happens with inflation, that is dependent on what happens with the labor market — at the moment it looks pretty hopeful that step-by-step cuts could also continue this year.'
