European Central Bank Governing Council: May have to lower interest rates to below 2%

European Central Bank committee member Wim Schis said that due to the possibility of global trade wars lowering consumer prices, the European Central Bank must be ready to lower interest rates to "slightly below" 2% at any time. He said: "If I look at the economy - the shocks we are facing and the uncertainties about growth - there may be reasons to provide mild support." He said that this may mean lowering the central bank's key deposit arrangement interest rate to "slightly below 2%". Since June last year, the European Central Bank has cut interest rates 7 times, lowering the benchmark rate from 4% to 2.25%. The market currently expects the European Central Bank to cut interest rates by 25 basis points in June, and to cut interest rates by another 25 basis points in the second half of this year, bringing the deposit arrangement interest rate to 1.75%. Schis said that when he sees market forecasts, he "is not surprised". Schis' comments supporting further interest rate cuts are in stark contrast to his relatively hawkish stance in the past. In February of this year, he said that the European Central Bank should not "recklessly lower interest rates to 2% as if sleepwalking".