European Central Bank (ECB) Governing Council member Gediminas Simkus said on Tuesday that an interest rate cut of 25 basis points is needed at this month's meeting, stressing the ECB must move to a less restrictive stance. He argued the United States' tariff announcement "warrants more accommodative monetary policy" and that the rate will still be "at the upper bound of the neutral interval" after another cut.
Simkus ruled out the possibility of a 50-point rate decrease, saying that it would be "too much." Looking at the medium term, he estimated that the worsening of trade tensions could be deflationary and that the ECB is more likely to undershoot or be at target than overshoot.
