ECB June rate cut looks increasingly likely — but there are 'still some caveats,' German central bank chief says

First of all, it’s good news that inflation is coming down. So I think this is what we would like to achieve when we hiked interest rates. Talking about the June meeting, I think the probability is increasing that we will see a rate cut in June, but there are still some caveats. So core inflation is still still high. Service inflation is high. For the June meeting, we will get our new projections. So we will get our new forecast and if there is a confirmation that inflation is really going down and we will achieve our target in 2025, as I said, probability is becoming higher that we will have her then this this rate cut in. If we’re here here for the June meeting, how worried are you about the wage data coming through still and potentially any movement in oil prices and in shipping given the events of the weekend in the Middle East? I guess wage prices, I think labour markets are strong in the whole eurozone, in Germany. So there is still some wage momentum. So for example, across wages in Germany on an annual basis are in the area of roughly around plus 4.5%. There’s still some, let me say, momentum from the wage side. So we have to look at that. But it looks like that even for wages, the wage development is slowing down. Oil prices, energy prices, if you see the oil price compared to last year’s roughly around 10% more gas price is lower. So this is an uncertainty and as I what I said for the wages, the same for the energy side. We have to analyse this and this is a volatile environment. What sort of pressure could more volatile oil prices, energy prices bring to German industry when we’ve already seen manufacturing in the doldrums? I think we learned the lesson in 2022 I think so we are exposed to all this. So but it’s not only true for Germany, but I guess also we learned our lesson from 2022. I think we, we we are more resilient than we were maybe two years ago. So but nevertheless I think if oil prices, if energy prices are going up, this is not only something for Germany, this is for for all of us. Let me just get you to sketch out the playbook. Then for the rest of this year, if we get a June card, what happens after that? There seems to be it’s a lack of transparency, really a lack of ability to forecast or what is beyond June. And even for June, as I said, there are some things we have to see. What are the numbers? What will the numbers tell us as a news story for our June meeting? And then we will see what does it mean for the July meeting. But frankly, speculating beyond June, this is in my understanding not very helpful. So are some members of the governing Council then speculating because some are willing to commit and forecast three to four rate cuts for this year? Yeah, I heard that. I read that. But as I said, for me it’s important to think from meeting to meeting. This was a good approach for the last two years and this is still my understanding how we should do monetary policy in here in the eurozone.