(Bloomberg) -- The European Central Bank probably won’t need to lower borrowing costs in the first six months of next year, Governing Council member Martins Kazaks said — pushing back against investor bets for cuts as early as the spring.

Given the current economic outlook and medium-term projection baseline, there’s no need for rate cuts in the first half of 2024, the Latvian central bank chief said Wednesday in a presentation at an MNI Connect investor conference.

If the outlook changes, however, and the balance of risks for price stability shifts, “our decisions on rates might change,” Kazaks said. The comments were first reported by Econostream Media.

Traders are ramping up wagers on ECB monetary easing as policymakers signal they’ve probably tightened enough to return inflation to 2%. Money markets see 150 basis points of interest-rate cuts next year — the most priced so far this cycle — with a first reduction expected as soon as March.

Not everyone agrees with that timetable, however. Sabrina Khanniche of Pictet Asset Management told Bloomberg Television Wednesday that the ECB won’t cut rates until the fourth quarter of 2024 due to persistent upward pressure on prices.

The ECB will hold its final policy meeting of the year next week, with no change in rates expected. Borrowing costs are at “levels that are contributing forcefully to inflation normalization,” according to Kazaks, who said the focus now is on the speed with which tightening feeds through the financial system. 

The inflation path is “likely to remain bumpy,” he said. A “clear peak in wage growth” hasn’t yet emerged and similarly there’s “no clear decline in profit margins visible yet.”

(Updates with more from Kazaks in sixth paragraph.)

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