Yannis Stournaras is the Governor of the Bank of Greece and thus a member of the European Central Bank Governing Council (monetary policy setting committee).
Speaking in Copenhagen, Stournaras said the ECB is probably done cutting interest rates, unless there is a meaningful deterioration in inflation or growth.
Stournaras explained that while inflation is forecast to remain slightly below 2% for several years, “that alone isn’t enough to justify more interest-rate reductions.” He described policy as being in “a good equilibrium – not a perfect equilibrium, but a good one,” adding: “For the moment there’s no reason to act on rates.”
Officials kept borrowing costs unchanged last week (September 11) for a second meeting in a row, viewing price pressures as contained and risks as manageable. “We’re data dependent — if we find in our monetary-policy meetings that things have changed, we’ll change as well,” Stournaras said, but stressed that “it would take a substantial change in our outlook to change our position.”
He also noted that risks remain tilted to the downside from tariffs and geopolitical uncertainty, though “these risks aren’t severe enough to justify another cut.” The ECB’s September forecasts project inflation at 1.7% next year and 1.9% in 2027, with December’s update extending to 2028. “For the moment we think that 2028 inflation is going to be close to 2%, but close from below not from above,” he said, urging caution.
Stournaras downplayed the significance of another quarter-point cut, saying it “won’t have much of an impact in practice, but symbolically, yes, it might.” He also rejected the idea that a stronger euro alone would shift policy: “We’re not in a situation in which a single factor can change our position.”
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Likely market-Impact of such comments:
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FX: Euro supported as ECB signals rate-cut cycle is over barring major shocks
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Rates: Eurozone bond rally may stall with ECB stressing data-dependency and “good equilibrium”
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Equities: Limited near-term boost for stocks as further easing seen unlikely