06 Jun 2024

Florian Heider: “The ECB is sending an important signal going forward”

SAFE Director considers that the European Central Bank’s (ECB) current monetary policy decision has come at the right time, but sees no reason to rush

At its meeting today, the Governing Council of the ECB decided to cut the interest rate on its main refinancing operations, as well as the rates on its marginal lending facility and deposit facility, by 25 basis points each. Florian Heider, Scientific Director of the Leibniz Institute for Financial Research SAFE, comments on the decision:

“With today’s decision, the ECB has initiated the turnaround on interest rates that it has been cautiously and publicly working towards for some time. The moderate rate hike comes at the right time: inflation has been curbed, even if core inflation in Europe has recently risen slightly. Against this backdrop, in particular, today’s decision by the ECB Governing Council is an important signal for economic development in the euro area. However, there is no reason to rush: after this first step, the ECB would be well advised not to cut interest rates too quickly or extensively. Faster steps are still possible if economic and labor market data develop positively.”

Scientific Contact

Prof. Dr. Florian Heider

Scientific Director