European Central Bank May Lower Interest Rates Before US Federal Reserve
ECB Governing Council Member Suggests Interest Rate Cut
VIENNA – The European Central Bank is considering lowering its key interest rate before the U.S. Federal Reserve, according to ECB Governing Council member Robert Holzmann. Holzmann stated that Europe’s economy is growing more slowly than its U.S. counterpart, making it likely for Europe to cut interest rates first.
Robert Holzmann’s Decision to Step Down as Governor
Robert Holzmann, the 75-year-old governor of the Austrian National Bank, announced that he would not seek a second term at the helm of the country’s central bank. His term is expected to conclude by the end of August 2025.
Discussion Within the ECB Governing Council
Holzmann mentioned that the timing of rate cuts is currently under discussion within the ECB’s Governing Council. He expressed his belief that interest rate cuts are likely to happen, with the exact timing depending on wage and price developments by June.
Impact of Wage Agreements on Borrowing Costs
According to Holzmann, the lower the wage agreements in Europe, the more flexibility there would be to reduce borrowing costs. This factor plays a significant role in determining the timing and extent of interest rate cuts in the region.
