European Central Bank (ECB) Governing Council member Gediminas Šimkus said on Friday “I agree with markets which see two more rate cuts this year.”
“Interest rates will keep getting lower, and quite significantly,” he added.
Further comments
Services inflation is still very strong.
Economic expansion is likely weaker than forecast.
There is no reason for cuts to exceed 25 bps each.
There is no doubt that the topic of a cut will be discussed in September.
A cut of 1% per year is significant.
Market reaction
EUR/USD is holding a lower ground on these above comments, testing 1.0880, down 0.13% on the day.
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