ECB’s Schnabel says June rate cut may be appropriate, path after is much more uncertain

European Central Bank Board member Schnabel speaking with Japanese media, Nikkei:

• Says depending on incoming data rate cut in June may be appropriate
  but path beyond June is much more uncertain
• Recent data have
  confirmed that the last mile of disinflation is most difficult
• Based on current
  data, rate cut in July does not seem warranted
• With inflation risks
  still being tilted to the upside, front-loading of easing process
  would come with a risk of easing prematurely
• We cannot pre-commit
  to any particular rate path due to very high uncertainty
• It’s virtually
  impossible to quantify a change in the natural rate of interest in
  real time with any reasonable degree of precision
• The closer we get to
  a potentially neutral level, and this could be well above 2%, we need
  to move even more cautiously
• 2% target has served
  us well, a change in the target is not appropriate

• Geopolitical shocks are a key risk that we need to watch, and this
  poses upside risks to the inflation outlook
• Over the
  longer run, geopolitical fragmentation would pose further upside
  risks to inflation by reducing the efficiency and reliability of
  global supply chains

Info via Reuters

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