European Central Bank Chief Economist Philip Lane stated on Wednesday that the argument for cutting rates by 50 basis points last week was to show that the ECB is no longer restrictive. He added that the disinflation process is well on track and domestic inflation should come down.
The official emphasised that the forward rates curve shows delivering on the 2% target requires more rate cuts to come. He also noted that financing conditions remain restrictive and that the ECB is determined to ensure inflation stabilises at 2%.
Lane also highlighted that it is prudent to maintain a meeting-by-meeting approach and not to pre-commit to any particular rate path.