The European Central Bank can keep its interest rates stable at 2 percent so far underway that there are no major shocks, said the new Governor of the Austrian Central Bank for Financial Times.
“For now, this interest rates cycle came to the end or is very close to the end,” said Martin Kocher in his first interview for international media since he joined the highest ECB’s decision-making.
Kocher spoke after ECB decided on Thursday to keep interest rates unchanged at 2 percent a second meeting in a row, emphasizing the EUROZONI resistance despite higher American tariffs on most of the goods block.
Previously, ECB halved borrowing costs in eight steps, starting from the mid 2024.
“With no major changes” data, the arguments that have led to this month’s decision “to a certain extent will continue to be maintained” at the following ECB meetings, he said.
This month, Kocher began his duty of the Oesterreichische Nationalbank (Oenb) after completing the six-year term of his predecessor Robert Holzmann.
Holzmann celebrated as the sharpest member of the ECB Administrative Council and was the only vote against the decisions on reducing interest rates, SEEbiz reports.
Asked about his own attitude, Kocher said that “currently leaning out the alight side” of the monetary policy and advised not to take over too much risks regarding inflation. “It’s an Austrian tradition,” he said.
Kocher said that “currently leaning around the barnegrad” of the monetary policy © Lisa Leutner / Reuters
He also emphasized that the monetary policy “has become more pragmatic” because more data is: “The Governing Board of the ESB is not a place for ideology, but the engine room of monetary policy, where optimal decisions should be made based on available data.”
After the decision on Thursday, traders estimate less than 50 percent for another quarter point reference interest rate on deposit services until the end of the first quarter of next year.
Inflation fell to the EDB medium-term goal of 2 percent and is expected to fall slightly below that threshold in the next two years.
However, Kocher warned that “important to remain careful and not to read too much in current stability”, pointing out the overall uncertainty arising from trade tensions and geopolitical conflicts.
“If the data changes, if the risk assessments change, then the answer will be required. It can go in both directions,” he said.
