European Central Bank Governing Council member Robert Holzmann stated in an interview with Politico that a 25-basis-point rate cut by the ECB in January is not a foregone conclusion for him at all.
The policymaker highlighted that the latest data showed that inflation in the euro area remained well above 2% in December, and it is likely to stay at a similar level in January. He cautioned that the ECB risks undermining its credibility if it proceeds with rate cuts while inflation rises faster than anticipated.
Holzmann also addressed the potential effects of euro depreciation against the dollar, noting that it might cushion the impact of possible U.S. tariffs on one side, but could boost import prices on the other.