Economist: Significant Rate Cuts Unlikely Even if Inflation Declines Further

ECB Chief Economist Lane said that while most factors suggest that inflation in the Eurozone will continue to decline, there are other factors that could push inflation higher, including tensions between the EU and the US and failed trade negotiations. When asked what this means for interest rate policy, Lane stated, "We need to find a middle ground." "If we see further signs of declining inflation, we will respond with further rate cuts," he added. But the scope of discussion is not that broad: no one is talking about significant rate cuts. "We are in a normal central bank policy area."