Kazak said that he is confident in monetary policy but calls for patience at the moment and said:
- Interest rates should begin to fall lower to fall.
- But the ECB is in no hurry to start this process right now. - Cutting interest rates too early would be worse than waiting a little.
- There is a risk that inflation will begin to return and then one will need to raise interest rates much more. ECB member Shimkus, who expressed confidence that the data would not support a rate cut in March, also spoke and then said:
- Interest rate cuts will be more likely as the year progresses.
- We are still less optimistic than the markets about lowering interest rates at the moment.
He could easily have mentioned April as well but he only singled out March specifically.
This shows that policymakers are fully aware of what the markets are thinking at the moment, as the probability of an interest rate cut next April is now more than 90%.
