In a recent interview with Skai Radio, Yannis Stournaras, the Governor of the Bank of Greece and a member of the European Central Bank (ECB) Governing Council, shared his perspective on the future of the ECB's benchmark interest rate. He forecasted that the rate is expected to decrease to approximately 2% by the fall of 2025.
Stournaras cautioned that this forecast may be subject to change due to 'unforeseen circumstances,' emphasizing the potential risks stemming from both Europe and the United States. As various economists and investors analyze the broader economic conditions, there seems to be a consensus forming around the outlook for inflation.
Specifically, many anticipate that as inflation stabilizes around the ECB's desired target of 2%, the Central Bank will likely initiate rate reductions at regular meetings, potentially starting mid-2025. This projection is tied to the ongoing economic challenges that the region faces, alongside the intricacies of global economic dynamics..