(MENAFN) Claire Lombardelli, chief economist at the Organization for Economic Co-operation and Development (OECD), said the euro zone could cut interest rates before the United States this year, reflecting the disparity in the relative strength of its economies. I expect it to be highly sensitive. Mr. Lombardelli emphasized the possibility of widening divergences in monetary policy between countries, particularly in terms of easing measures.
In an exclusive interview with Turkish News Agency, Lombardelli revealed insights from the OECD's economic outlook, saying that interest rates in developed countries are expected to start trending downward from the second half of this year as inflationary pressures ease. This forecast suggests a shift to more accommodative monetary policy settings to counter weakening inflation dynamics.
“We expect a rate cut in the euro area in the third quarter of this year, but it could be brought forward depending on the (inflation) data,” he said. I expect it to happen in both places.” she stated. “They may choose one or two interest rates, or they may choose to do it a little earlier than that. But by the end of 2025, euro area policy rates will be significantly lower than they have been in previous years. We are confident that it will be lowered.''We just saw. ”
The European Central Bank (ECB) has maintained interest rates on major refinancing operations, marginal lending facilities, and deposit facilities at 4.5%, 4.75%, and 4%, respectively, since September 2023, indicating a period of stability in monetary policy. There is.
Meanwhile, the US Federal Reserve is expected to start cutting interest rates in the third quarter of this year, or later, as Claire Lombardelli has suggested. The timing of this decision will depend on the development of inflation data in the coming months, along with the strength of the US economy.
In its latest announcement on Wednesday, the Fed reiterated its stance to keep the federal funds rate within a range of 5.25% to 5.5%. This level has remained unchanged since its July 2023 meeting, demonstrating a consistent approach to monetary policy as economic conditions and inflationary pressures evolve.
MENAFN05052024000045015839ID1108174432
Legal disclaimer:
MENAFN provides the information “as is'' without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.