ICYMI – ECB’s Knot increasingly confident on falling inflation, June rate cut realistic

Klaas Knot is President of De Nederlandsche Bank (DNB) – the central bank of the Netherlands – and thus a European Central Bank (ECB) Governing Council member.

Knot spoke with Japan’s Nikkei ICYMI:

“I am increasingly confident in the disinflation process”

• Euro zone inflation is falling towards 2%
• Geopolitical stress poses only moderate risks

June rate cut remains realistic if price and wage data continue to come in line with projections

• “After June, I would say: no pre-commitment to any specific time path”

• “We will have to take a cautious approach after June”

• “Every quarter, we will have an additional data point on the labor market going into a fresh round of projections and that will be an important piece of information for us to recalibrate our policy settings,”

Knot did express some wariness:

• “The experience of the US in the last three months has reminded us that we should still be vigilant” (on inflation progress)
• “it may well be only in the course of 2025 that this condition can be established” (the condition being inflation falling towards 2%)

This article was written by Eamonn Sheridan at www.forexlive.com.