• The European Central Bank has room to cut interest rates as inflation slows but must take its time in easing policy, even if the direction of travel is already clear, key policymakers said on Monday.
  • “Barring a surprise, the first rate cut in June is a done deal, but afterwards we have several degrees of freedom,” French central bank chief Francois Villeroy de Galhau told Germany’s Boersen Zeitung.
  • ECB chief economist Philip Lane took a more measured stance but warned that easing too late risked pushing inflation below target, which would then force the ECB to rush with rate cuts.
  • “Keeping rates overly restrictive for too long could push inflation below target over the medium term,” Lane said in a speech in Dublin. “This would require corrective action through a subsequent acceleration in rate cuts that could even require having to descend to below-neutral levels.”