29 April | Euro

Central bank may cut borrowing costs below neutral level — ECB's Olli Rehn

Central bank may cut borrowing costs below neutral level — ECB's Olli Rehn

Olli Rehn, a member of the Governing Council of the European Central Bank (ECB), said on Monday that the financial regulator may lower borrowing costs below the neutral level. According to him, US tariffs will impact eurozone inflation more than expected.

The ECB's benchmark rate is currently at 2.25%, which is the upper limit of the neutral range of 1.75% to 2.25%, experts from Reuters remind. That said, officials are increasingly open to a further rate cut in June, potentially larger than the usual 25-basis-point adjustment.

In his statement, Rehn emphasized the central bank's intention to maintain flexibility in its decision-making. The financial regulator is evaluating all options and does not rule out aggressive rate cuts.

Additionally, Rehn is part of a new task force aimed at simplifying banking rules. As he pointed out, reporting requirements are currently excessive, and the creation of a robust capital buffer is necessary to ensure the sustainability of the EU’s banking sector.

Elena Berseneva MarketCheese
Period: 25.07.2025 Expectation: 440 pips
AUDCAD gains on technical bounce and improved sentiment in commodity markets
Yesterday at 10:05 AM 28
Period: 25.07.2025 Expectation: 1700 pips
GBPUSD struggles to regain momentum as uptrend breaks
Yesterday at 09:14 AM 26
Period: 25.07.2025 Expectation: 222 pips
Buying natural gas with target at 3.780 amid record heatwaves in US and Asia
17 July 2025 62
Period: 25.07.2025 Expectation: 15000 pips
ETHUSD rally accelerates as US moves forward with crypto legislation
17 July 2025 65
Period: 23.07.2025 Expectation: 600 pips
USDCAD gains strength amid dollar rally and falling oil prices
16 July 2025 86
Period: 25.07.2025 Expectation: 1000 pips
Nvidia's return to China pushes shares toward 180 level
16 July 2025 78
Go to forecasts