European Central Bank's Schnabel: Caution should be maintained in interest rate measures

Executive Board member Schnabel of the European Central Bank said that the ECB should be cautious in its interest rate decisions. She said, "It is necessary to maintain stability at the moment. We can roughly keep interest rates at their current levels, and we are confident that this will help maintain price stability." The European Central Bank has already cut interest rates seven times, and economists and markets are betting on another 25 basis point cut in June. While several policymakers have indicated they would support such a move, Schnabel avoided the question, saying that it remains to be seen what will happen. The uncertainty caused by Trump's trade war has cast a shadow over the outlook, and Schnabel emphasized the significant difference in the impact on inflation in the short and medium term. She stated that the drop in energy prices and global economic slowdown "should dampen inflation in the short term, but everything could reverse in the medium term." She also emphasized that the recent appreciation of the euro should be "interpreted as a signal of confidence" in the currency and that Europe should seize the opportunity.