ECB/Nagel: It's too early to talk about interest rate cuts

European Central Bank Governing Council Member and Bundesbank President Joachim Nagel stated that it was too early to discuss interest rate cuts. Nagel gave the message that there could be another interest rate hike if necessary. ECB Governing Council Member Nagel said that another interest rate hike may be necessary if the inflation outlook worsens. Nagel said that it was too early to discuss interest rate cuts. The ECB ended the interest rate hike cycle it started in October due to high inflation. The bank is expected not to raise interest rates at its December meeting either. The first interest rate cut was priced into the markets in April. Regional inflation peaked at 10.6 percent last year and then fell to 2.9 percent in October. Nagel stated that headline inflation had fallen significantly in recent months and said, "The disinflationary effects of falling energy prices have diminished and we are still far from our inflation target. We see a bumpy path in inflation in the near future." Nagel stated that there could be a new interest rate hike if the inflation outlook worsens. "The tight labor market, low debt levels of companies and households, and the recovery in investment activity suggest that conditions for a 'soft landing' are emerging," Nagel said, adding that there may not be a hard landing in the economy.