The dispute over the threshold for interest rate cuts is tearing apart the European Central Bank. Doves warn of "growth dragging down inflation," while hawks refute that "economic resilience still exists."
According to the Wise Finance APP, there have been divergent opinions among European Central Bank officials regarding interest rate policy in recent days. ECB board member Fabio Panetta believes that if economic growth falls short of expectations and inflation is excessively low, interest rates should be further lowered. However, Executive Board member Isabel Schnabel emphasizes that the threshold for lowering interest rates is very high and should only be considered when medium-term inflation significantly deviates from the target. She believes that current interest rates are appropriate and the economy is resilient. It is worth mentioning that both of them acknowledge the need to make decisions based on the economic and inflation situation, but they have different opinions on the necessity of loosening monetary policy.
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