ECB's Muller urges caution on further rate cuts

According to Governing Council member Madis Muller, the European Central Bank (ECB) should exercise caution regarding additional interest rate cuts, as the eurozone economy currently shows no clear need for further stimulus.

Muller stated that interest rates are already sufficiently low to support economic recovery without hindering growth. While further monetary easing may be justified, the appropriate scale of such measures remains uncertain, he added.

The ECB has reached a balanced policy stance where any additional stimulus would require strong justification, Muller emphasized. This comes as Bloomberg economists anticipate another rate cut as early as June 5.

While some officials support near-term easing, others warn of persistent inflation risks. Muller highlighted additional challenges, including trade uncertainty and potential US tariffs, which could dampen eurozone growth. He also noted that expanded fiscal spending, particularly on defense, might create upward price pressures across the bloc.