Latest news with #IsabelSchnabel
Zawya
4 days ago
- Business
- Zawya
ECB's Schnabel sets bar 'very high' for rate cut as economy holds up
FRANKFURT - The hurdle for another interest rate cut by the European Central Bank is "very high" as the euro zone economy is holding up better than expected despite uncertainty over trade, ECB board member Isabel Schnabel said in an interview published on Friday. Having halved its policy rate in just a year, the ECB has signalled it will now stay put and see how the economy copes with a simmering global trade war stoked by U.S. President Donald Trump. Schnabel expressed a clear preference for keeping rates steady as inflation was moored at ECB's 2% target, the euro zone economy was proving resilient and more government spending in Germany was brightening the outlook. "Inflation is projected to be at 2% and inflation expectations are well anchored," Schnabel told financial newswire Econostream. "In view of this, our interest rates are also in a good place, and the bar for another rate cut is very high." The ECB cut its policy rate to 2% last month - a level that Schnabel said was "becoming accommodative". The ECB's official range for the neutral rate, which is neither accommodative nor restrictive, is 1.75% to 2.25%. She said she would only back a cut if she saw "signs of a material deviation of inflation" from 2% and spoke against "fine-tuning" the rate in response to data such as swings in oil prices. The ECB's chief economist Philip Lane also said recently that the central bank would react to "material" changes in the euro zone's inflation outlook and ignore "tiny" ones. Striking a different tone to some of her colleagues, Schnabel played down recent strength in the euro's exchange rate, saying its "pass-through" to inflation would be limited and it reflected an improved economic outlook. "It seems that the uncertainty is weighing less on economic activity than we thought, and on top of that, we're expecting a large fiscal impulse that will further support the economy," she said. "So overall, the risks to the growth outlook in the euro area are now more balanced." She argued tariffs would prove inflationary over the medium term because of higher costs and less efficient supply chains, "which are not included in our standard projection models". (Reporting by Francesco Canepa. Editing by Alison Williams and Mark Potter)
Wall Street Journal
4 days ago
- Business
- Wall Street Journal
ECB's Bar for Another Rate Cut Is High, Schnabel Says
The European Central Bank should refrain from lowering interest rates again after inflation in the 20-nation currency area hit the 2% target in June, rate setter Isabel Schnabel said Friday. 'Our interest rates are also in a good place, and the bar for another rate cut is very high,' Schnabel said in an interview with Econostream Media.
Bloomberg
4 days ago
- Business
- Bloomberg
ECB's Schnabel Calls Bar for Another Cut Very High: Econostream
European Central Bank Executive Board member Isabel Schnabel said there'd have to be a major downward shift in inflation to justify another reduction in borrowing costs. In an interview with Econostream, Schnabel said interest rates are 'in a good place,' with disinflation proceeding broadly as expected and the 20-nation economy proving resilient.
Yahoo
4 days ago
- Business
- Yahoo
ECB's Schnabel sets bar 'very high' for rate cut as economy holds up
FRANKFURT (Reuters) -The hurdle for another interest rate cut by the European Central Bank is "very high" as the euro zone economy is holding up better than expected and inflation is moored at 2%, ECB board member Isabel Schnabel said in an interview published on Friday. "Inflation is projected to be at 2% and inflation expectations are well anchored," Schnabel told financial newswire Econonostream. "In view of this, our interest rates are also in a good place, and the bar for another rate cut is very high." Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Zawya
26-06-2025
- Business
- Zawya
Euro zone bond yields dip; focus on spending plans, ECB policy
LONDON - Germany's 10-year bond yield fell on Thursday after rising the day before, but remained within its recent narrow range as markets weighed worries about rising fiscal spending against the outlook for monetary policy. Germany's 10-year government bond yield, the euro zone's benchmark, was last down 2 basis points at 2.54%, after rising three bps the day before. The 30-year yield was down 1.5 bps at 3.05%. Investor focus has been on the longer-end of the curve, with expectations that euro area countries, led by Germany, will ramp up borrowing to increase spending on defence. On Wednesday, NATO leaders agreed to boost spending on defence to 5% of GDP, but some European nations, already running large deficits and seeing debt balloon, may struggle to meet the target. Germany, which has greater scope to increase spending, published its draft budget for 2025 earlier this week, which included record investments to boost growth. Germany's two-year yield, which is more sensitive to changes in monetary policy expectations, was down 1.5 bps at 1.831%. The European Central Bank lowered its deposit rate earlier this month but signalled it was done with rate cuts for now after lowering borrowing costs eight times in just over a year. The central bank's vice president Luis de Guindos and influential rate setter Isabel Schnabel are both scheduled to deliver speeches later on Thursday. Italy's 10-year bond yield was down 2.5 bps at 3.484%, pushing the yield gap between Italian and German 10-year bonds tighter by 1 bp to 93 bps. (Reporting by Samuel Indyk; Editing by Joe Bavier)
