ECB's Makhlouf: Rate cut not the best tool to use in the current circumstances

Author: Justin Low | Category: Central Banks

Comments by ECB governing council member, Gabriel Makhlouf

  • Evidence has not changed that we need to make new decisions
  • But nothing is off the table, we have a pretty big toolkit
  • Our view has been that a rate cut is not the best tool to use currently
  • If economies close up again, not sure it would exactly be as bad as April, May
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The key takeaway is that they're still content to maintain the current wait-and-see approach despite inflation concerns and the virus situation worsening across the region.

In terms of policy decisions, one can expect them to expand PEPP stimulus as the next first point of action if and when needed.

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