European Central Bank Governing Council member Robert Holzmann suggested on Saturday (December 28) that the ECB could delay its next interest rate cut given a recent rise in the euro area inflation.
The official, however, noted that he does not see any interest rate hikes at the moment. "What could happen, though, is that one takes more time until the next interest rate cut," he added.
Holzmann noted that while there are indications of rising energy prices, there are also other scenarios as to how inflation could return, like via a sharper depreciation of EUR.
Asked about the potential impact of trade tariffs under incoming U.S. President Donald Trump, the policymaker said that tariffs might lead to an overall slowdown in growth while simultaneously creating inflationary pressure, with the effects likely being more pronounced in the U.S. than in Europe. "How strong the effect will be depends crucially on whether and how much the dollar appreciates and the euro depreciates," Holzmann explained.