LISBON (Reuters) – Inflation in the euro zone has slowed to converge with the European Central Bank’s 2% target and the risk now is undershooting the goal, which could stifle growth, ECB policymaker Mario Centeno told an event in Washington on Tuesday.
He called for a “gradual, steady and predictable reduction in interest rates” to their neutral level, which he said was “maybe 2% or slightly lower”.
The ECB lowered interest rates for the third time this year on Thursday and investors now see rate cuts at each of the central bank’s next four or five meetings amid signs inflation could ease more quickly than previously thought while growth in the euro zone remains weak.
