Gabriel Makhlouf cautions against hasty decisions on rate cuts
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The European Central Bank should be able to make a decision on interest rates in June, according to Governing Council member and governor of the Central Bank of Ireland, Gabriel Makhlouf.
“The history of monetary policy tells us that rushed decisions tend to be wrong decisions,” he wrote in a blog post on Friday.
“Patience is a virtue. But waiting for clear and unambiguous evidence is also not realistic and we have to manage the uncertainty and make decisions on the evidence in front of us.”
Ireland’s central bank chief said that his “current view is that the picture should be sufficiently clearer when the Governing Council meets in June (as we will have a lot more information — particularly on wage dynamics — available in our deliberations) to give us sufficient confidence to make monetary less restrictive.”
Fellow policymakers have also voiced their preference to start lowering borrowing costs that month, though some have suggested an earlier move could be possible.
“Given the continued disinflation we have seen and progress on underlying inflation, it’s becoming clear that there is scope for a change in our monetary policy stance, and, specifically, to make it somewhat less restrictive,” Mr Makhlouf said.
“I remain open-minded as to when any reduction in our policy rates should take place.”