European Central Bank board member Holzman: Inflation risks still exist, interest rate cuts this month are still uncertain.

European Central Bank governing council member and Governor of the Austrian National Bank, Robert Holzmann, said on Tuesday that due to "some issues" with inflation in the Eurozone, it is still unclear whether the European Central Bank will cut interest rates again at its policy meeting on January 30. He stated, "I don't know what will happen in two weeks. I think interest rates cannot continue to decrease in a straight line, especially given the recent issues we have encountered with inflation. Core inflation is still close to 3%, not 2%. We are facing many challenges in terms of energy." However, this hawkish official also noted, "We hope to achieve the inflation target by the end of this year, in 2025." In contrast, European Central Bank governing council member and Governor of the Bank of Finland, Olli Rehn, expects that by the mid-2025 Eurozone interest rates will reach a level that no longer constrains economic activity. Rehn previously stated that it makes sense to continue cutting interest rates in the context of inflation coming back on track and weakening economic growth prospects. The direction is clear, and the scale and speed of rate cuts depend on the upcoming data. Recently, European Central Bank Chief Economist Philip Lane stated that the ECB could further loosen its policy this year, but it must find a "middle ground" that will neither trigger a recession nor cause delays in suppressing inflation. As traders continue to digest last Friday's strong US non-farm payroll data, the currency market is reducing bets on the European Central Bank cutting interest rates and is more inclined towards three rate cuts in 2025, each by 25 basis points.