ECB Council Member Holzmann Urges Postponement of Interest Rate Cut Until September Amid Trade War Concerns

Published: May 28, 2025 11:08

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[ECB Governing Council Member: Interest Rate Cut Should Be Postponed Until September at Least] European Central Bank (ECB) Governing Council Member Holzmann stated that the bank should postpone further interest rate cut plans until September at least, and warned that given the brewing trade war between the EU and the US, caution should be exercised. He believes that the ECB has "no reason" to cut interest rates at its meetings in June and July. Holzmann said, "The risks of further interest rate cuts will outweigh the benefits of maintaining the current level." He believes that further interest rate cuts at this stage may be "completely ineffective" for economic activity in the eurozone. Holzmann's hawkish remarks indicate a divergence among ECB rate-setters as they weigh how to respond to the trade war initiated by Trump ahead of their next meeting on June 5.

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