ECB’s Centeno Says Policy Decisions Should Be ‘Gradual’

(Bloomberg) -- European Central Bank policy decisions should be “gradual,” according to Governing Council Member Mario Centeno.

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“We should draw a path that doesn’t take us to go backward and forward, which confuses economic agents and therefore is damaging for credibility and for the way our decision is read,” Centeno, who also heads the Bank of Portugal, said in an interview with Jornal de Negocios published Thursday.

• Asked if the ECB could lower interest rates at its July meeting, Centeno said “it’s possible to cut rates at all meetings”

• “We entered a new state of this monetary-policy cycle, the first cut in interest rates determined the start of this process and it’s a medium-term process”

• “The data have been in favor of our view of the interest-rate process and the monetary-policy cycle and that’s what confirms that it will maintain itself and that in the future there will be more cuts in interest rates. We should focus on the dimension of monetary policy always in the medium term and not so much in what happens month after month. That’s true for inflation, but it’s also true for the interest rate”

• Centeno doesn’t think market is too optimistic about rate cuts this year

• Read more: ECB’s Stournaras Sees Two More Rate Cuts in 2024 as ‘Reasonable’

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