The European Central Bank (ECB) is considering more than three interest rate cuts this year, according to Lithuanian policymaker Gediminas Simkus as reported by Reuters on Monday.
Simkus suggested that these reductions should proceed even if the US Federal Reserve postpones its own cuts. He indicated that the ECB could decrease its 4 per cent deposit rate in both June and July.
Despite market expectations of only three cuts this year due to high US inflation data, Simkus sees a possibility for an additional cut in July.
The ECB’s decisions are independent of the US Fed’s actions, and policy divergence affects trade conditions and economic development in both regions, according to Simkus. However, he acknowledged that unexpected global political tensions could alter the ECB’s plans.
