On January 23rd, Holzmann, the Managing Director of the European Central Bank, stated that it would be best for the ECB to “wait a little longer” before cutting interest rates again. Holzmann believes that if interest rates are cut now, the European Central Bank will face the danger of needing to raise rates later. If that were the case, it would seriously undermine the credibility of monetary policy. Holzmann said that some inflation indicators are still very high, and Donald Trump’s measures may also exacerbate price pressures.
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