(Bloomberg) -- The European Central Bank should be cautious about the signal that a second consecutive interest-rate cut in July would send to investors, Governing Council member Pierre Wunsch told Econostream in an interview. 

“Cutting again in July would be interpreted by markets to mean that we’re going to cut every meeting,” the Belgian central-bank chief was cited as saying. “And that would lead to repricing that might go too far.” 

The ECB is gearing up for a first reduction in rates at its June 6 meeting, though policymakers are still debating what to do after that. Most have urged to keep an open mind and take decisions based on incoming data while stickier-than-expected inflation in the US and volatile geopolitics create uncertainty. 

Wunsch also said: 

  • “For me, July is not a done deal, as much as I believe that, unless we are faced with bad news, we are going to do at least two cuts in 2024”
    • “That doesn’t mean for me that we’re going to cut in July; far from it, we need to be cautious”
  • Link to interview here
  • Read More: ECB’s Wunsch Says Decisions Will Become Tougher After Two Cuts

(Corrects name of media in headline.)

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