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Economists: The European Central Bank could lower interest rates to neutral levels or lower.
On June 5, Kallum Pickering, senior economist at Peel Hunt, said that European Central Bank policymakers concluded that the U.S. shock to global trade would have a net disinflationary impact on the euro area, revealing an important detail about the ECB's response mechanism, that is, if downside risks to economic growth begin to emerge, the ECB may ease monetary policy more aggressively. There are few signs of upside risks to inflation, suggesting that policymakers are confident that the 2% inflation target will be achieved and its sustainability will mean that the ECB can at least cut interest rates to neutral or even lower, but the question is where the neutral level is.
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