ECB’s Holzmann says rate cuts in 2024 aren’t guaranteed

ONE of the European Central Bank’s most hawkish governing council members said it’s too early to talk about lowering borrowing costs, and such a move in 2024 is anything but certain. 

“Even if the ECB is past an unprecedented series of ten consecutive rate increases, there is also for the year 2024 no guarantee of rate reductions,” Robert Holzmann said on Thursday (Dec 28). “Monetary policy normalisation is already showing its impact on slowing inflation, but it would still be premature to think about rate cuts.”

Earlier this month, the ECB held rates steady for a second time, though President Christine Lagarde signalled that market bets on cuts as soon as March may be premature. That’s partly because consumer-price growth will see an uptick again in coming months due to base effects.

Euro-area inflation to probably reach the ECB’s 2 per cent target in the next two years, though the path there will be “challenging,” said Holzmann, who heads Austria’s central bank. BLOOMBERG