European Central Bank (ECB) officials remain cautious about their next interest rate decision, pointing to ongoing global trade tensions and economic uncertainty. Members of the Governing Council from Slovakia and Estonia emphasized the need for further data before committing to any policy move.
Slovak official Peter Kazimir acknowledged market expectations but maintained an open stance on whether to hold rates steady or implement further cuts. “The April meeting will be very interesting,” he said, stressing that the decision will depend on fresh economic indicators, particularly inflation and its composition.
Estonian counterpart Madis Muller echoed this sentiment, highlighting that monetary easing pauses should not be ruled out. He pointed to uncertainties surrounding US tariff policies and European defense spending, both of which could significantly influence economic conditions. “Given the high level of uncertainty, it may be wise to pause and assess new data before making further rate decisions,” he noted.
Both officials agreed that borrowing costs are no longer constraining economic activity, suggesting that interest rates have reached neutral levels. Kazimir emphasized that the neutral rate is not a fixed point but a range, and current levels already fall within that range.
Following six consecutive quarter-point cuts since June, financial markets remain divided on the likelihood of another reduction in April. The ECB's reluctance to commit stems partly from the upcoming US announcement on reciprocal tariffs, scheduled for April 2, which could have unpredictable global repercussions.