"ECB may cut interest rates by more than 100 basis points"

European Central Bank (ECB) Executive Board Member Mario Centeno said the bank could cut interest rates by more than 100 basis points this year. Portugal’s Central Bank Governor and ECB Executive Board Member Mario Centeno told Ecostream Media in an interview that he was open to cutting interest rates by 100 basis points this year, depending on inflation reaching its target faster than expected in March. Centeno said that even with this amount of reduction, they would remain at a “restrictive level.” Noting that inflation is currently close to the 2% target, the official said, “We expect inflation to temporarily fall below 2% in the coming months. We cannot only cut interest rates when inflation reaches 2%.” Centeno said that waiting too long to change policy stance could necessitate more aggressive interest rate cuts. “Oil uncertainty will not prevent a cut in June” Another Board Member and French Central Bank President Villeroy de Galhau stated that even if the tension in the Middle East causes a jump in oil prices, policy makers will analyze the effects of this shock on prices and “will not give a mechanical reaction.” In an interview on Sunday, Villeroy responded to the question of whether “uncertainties will delay the interest rate cut process?” by saying, “Unless there is a surprise, we should not wait too long.” Villeroy continued his words as follows; “We believe that inflation will fall to 2 percent by next year. Our duty is to minimize costs in employment and economic activity. In this sense, the first interest rate cut could be in June.” Like Villeroy, many ECB officials also point to the June 6 meeting for the first cut.