European Central Bank Governing Council member Mārtiņš Kazāks said in an interview with Econostream Media, published on Monday, that he thinks the ECB can cut rates in October. He added that the policymakers would have a new set of projections by the December meeting and then they would decide what to do at their final gathering of 2024.
Kazāks acknowledged that the ECB needs to keep a degree of monetary policy restrictiveness as inflation remains a problem, and worries
about economic growth have become more obvious and the risks are increasingly balanced. "All this permits another rate cut in October,’ he added.
The official also noted that he would be comfortable expecting continued cuts of the same magnitude unless the euro area economy is faring worse than expected. In Kazāks'opinion, a measured pace of monetary policy adjustment is the best approach. However, he added that, if the data worsen significantly and the policymakers see that things are moving to a different baseline scenario, then they "will do what
is necessary."
Additionally, he cautioned that the region's economy remained volatile, patchy, and weak and stressed that the policymakers are ready to adapt as soon as they see that the scenario has shifted.