ECB Aims for Smooth Transition Into Rate Cuts, Vujcic Says

Boris Vujcic, a member of the Governing Council, asserts that the European Central Bank (ECB) intends for a smooth transition into rate cuts. He also asserts that the ECB may take breaks along the way to ensure that the economy is not harmed.

Vujcic told reporters in Zagreb on Tuesday that quarter-point steps are preferable to larger ones. He added that the economic difference between starting to ease policy in April or June is negligible.

However, given that additional data are required to determine the best course of action, making a decision now is premature, he stated.

Vujcic stated, “It’s more important that we achieve a kind of smooth transition to rate cutting.” “This difference between April and June doesn’t really make much of a difference for the economy.” 25 premise point moves are desirable over bigger moves that normally happen when you feel you’re a piece sub-par.”

Policymakers from across the 20-country eurozone have ringed in the discussion about when the ECB could begin its rate-cutting cycle after President Christine Lagarde made the way for a move as soon as April. France’s Francois Villeroy de Galhau said not even Walk is rejected as a choice, while a portion of the gathering’s more hawkish individuals have communicated an inclination for June.

“For rate traders, the date is important; Vujcic stated, “The pace is more important for the economy and for us.” It doesn’t need to be consistent like we saw on the way up — there will presumably be stops.”

Then obviously there’s the subject of “where do we end up on the way down,” he added.

Vujcic stated that the economy is on track for a soft landing and that the chances of a recession are getting smaller in response to a report from earlier Tuesday that indicated that output in the euro area remained stagnant in the fourth quarter.

“We really do expect that the economy will recover this year so we have a humble pace of development combined with disinflation,” he said. In any case, “we will in any case need to sit tight for additional information long before we go with a choice” on rates.