European Central Bank Governing Council member Gediminas Simkus said on Thursday that the ECB has arrived at a neutral level of interest rates. He stressed the importance of maintaining the freedom to make decisions without committing to any particular direction, especially given the very unclear economic outlook.
Simkus pointed to uncertainty around upcoming U.S. decisions on July 9 and said it’s important to pause and assess where things are moving systemically. The official, however, stressed that he does not reject the possibility of another rate cut this year and noted a rising risk that inflation may fall below the medium-term target. He also underlined that in the current uncertain environment, data dependency and a meeting-by-meeting approach remain critical.