Rehn: The Pace of Interest Rate Cuts Will Be Determined Based on Data and Analysis at Each Meeting

Forex - Olli Rehn, a member of the European Central Bank (ECB) Governing Council and Governor of the Bank of Finland, stated that inflation in the Eurozone has stabilized more clearly around the ECB's 2% target, which is helping to set the stage for further interest rate cuts. Rehn said, "The direction of our monetary policy is now clear. The pace and scale of rate cuts will be determined at each meeting based on incoming data and comprehensive analysis."

He indicated that uncertainties related to trade policy are affecting the short-term economic outlook and that risks are skewed to the downside; he added that Europe should be prepared to face trade disputes with the United States. Rehn continued: "Negotiation is preferred, and the EU's negotiating position can be strengthened by demonstrating readiness to take countermeasures in advance if the U.S. threatens Europe with higher tariffs."

The Bank of Finland announced that due to the uncertain outlook for the global economy, the return to economic growth in the country will be slow in 2025, reiterating a forecast of a shrinking economy in 2024. The Bank of Finland kept its 2024 GDP forecast at a contraction of 0.5% and reduced the GDP growth projection for 2025 from 1.1% to 1%.