ECB official Dolenc says the bank's easing cycle is likely over.
Slovenia's acting central bank governor Primoz Dolenc told the newspaper Delo that the European Central Bank's rate cuts may have come to an end.
According to a report published on Monday, Dolenc said in an interview that at the most recent Governing Council meeting held in July, the general consensus was that the easing "cycle has ended, and we can take a break now." Dolenc attended the meeting but did not have voting rights.
"From July until now, there has been nothing new that would change this view. We can keep interest rates at their current level because this will ensure we achieve our inflation target in the future," he said.
Since launching the easing cycle a year ago, European Central Bank officials kept rates unchanged for the first time in July, and it is widely expected that next week's meeting will be the same. Given that the inflation rate is near the 2% target and the economy remains resilient, investors are no longer certain there will be another rate cut this year.
This view has become even more entrenched after the European Union and the United States reached a trade agreement. Under the agreement, the United States will impose a 15% tariff on most EU products.
Uncertainty has always been "the biggest issue," Dolenc said. "This agreement removes that uncertainty. That is crucial."
He added that the tariffs will be slightly higher than forecast in June. "But this will not significantly change our estimates of future economic activity, especially inflation expectations," he said.
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