Headline: Kazaks: No Need for ECB to Consider Below Neutral Rates at the Moment

ECB Governing Council member and Latvian Central Bank President Martins Kazaks stated that the European Central Bank may need to loosen its policy slightly faster than previously considered. However, he mentioned that interest rates do not need to fall to a level where the bank stimulates economic growth. Kazaks said, "For rates to fall below the neutral rate, the economic foundation needs to be significantly weaker, and the likelihood of our target falling significantly and persistently below the mark needs to be apparent. I do not see that right now; we are not at that point. Inflation might be declining a little faster than the bank predicted in September, but this only moves the date of achieving the target closer and does not represent a fundamental change in the inflation profile." He also noted that the growth in wages and service prices remains relatively high and that much of the lower boundary is caused by energy costs, suggesting that the ECB should be cautious with its policy. Kazaks added, "Reaching 2% in a sustainable way slightly earlier is possible, and reaching the target faster might require the pace of policy easing to be slightly faster than we had previously thought."