ECB’s Stournaras: Tariffs Could Warrant Aggressive Rate Cuts

By Sotiris Nikas

November 29, 2024 at 5:32AM EST

Yannis Stournaras, governor of Bank of Greece, during a Bloomberg Television interview in London, UK, on Thursday, Nov. 21, 2024. "As inflation develops now and as the real economy develops now, I think yes we should have a cut in every meeting from now on until we get to what we call the neutral rate," Stournaras said. Photographer: Betty Laura Zapata/Bloomberg (Betty Laura Zapata/Bloomberg)

(Bloomberg) -- It’s very likely that “we will have a more aggressive interest-rate reduction policy” if there’s evidence US tariffs will lead Europe into recession, European Central Bank Governing Council member Yannis Stournaras says in an interview with ERT News, according to an emailed transcript sent by his office.

In such case, final rate level could even be lower than 2%, Stournaras says
“Most likely scenario” for December’s meeting is to cut rates by 25 bps
“Can’t exclude” possibility of reducing the rate level by 50 bps, but this would have been an “extreme” scenario, just like extreme would be not to cut at all, he says