Mario Centeno, a member of the Governing Council of the European Central Bank and Governor of the Bank of Portugal, pointed out that the disinflationary pressures facing the European economy have become a source of concern for monetary policymakers, explaining that it may now be necessary for the European Central Bank to lower interest rates below the neutral level in order to sufficiently stimulate the economy to maintain inflation sustainability in the longer term.
Centeno's key statements included the following: Lowering the European Central Bank's inflation to below 2% would pose a risk to the economic growth of the Eurozone if investment does not recover. I believe that the ECB may need to lower the interest rate below the neutral rate to keep inflation at the 2% level. It is clear that the ECB needs to maintain a downward trajectory for interest rates. I agree with gradually lowering interest rates by 25 basis points in the upcoming meetings. Europe should be united in facing potential tariffs; I see a possibility for negotiations in the future.
