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ECB’s Stournaras Foresees Four Rate Cuts in 2024

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Yannis Stournaras, a member of the European Central Bank Governing Council, suggested the possibility of implementing four interest rate cuts in 2024, totaling a reduction of 100 basis points by the end of the year. Speaking with the Proto Thema Sunday newspaper, Stournaras indicated that if inflation aligns with the forecast from March and persists throughout the year, he anticipates the ECB will proceed with interest rate reductions.

Expressing his personal perspective, Stournaras stated that lowering interest rates four times this year, by 25 basis points on each occasion, is achievable. However, he noted that not all members of the Governing Council share this view, emphasizing that some are more cautious and advocate for more moderate rate cuts.

While Stournaras, who leads Greece’s central bank, leans towards a dovish stance on ECB policy, his views have not been universally adopted within the Council.

Recent inflation figures from France and Italy have bolstered the argument in favor of initiating rate cuts sooner rather than later. With the consumer price index edging closer to the ECB’s 2% target, most policymakers have signaled agreement with President Christine Lagarde’s indication that the first rate cut may occur in June.

Stournaras highlighted that despite varying opinions within the Governing Council, the divergences are narrower than often portrayed in the media, indicating a more nuanced landscape of perspectives.