Austrian Central Bank Governor Robert Holzmann speaks during an event Tuesday, Sept. 26, 2023, in Vienna, Austria.
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The European Central Bank may exceed market expectations and hold off on starting interest rate cuts for the rest of 2024, Robert Holzmann, a member of the institution's governing board, said on Monday.
Asked about those calling for the first rate cut as early as April, Austria's central bank governor told CNBC, “If we leave Davos, those people will be deeply disappointed.”
Speaking to CNBC's Steve Sedgwick at the World Economic Forum in Davos, Switzerland, he added, “I can't imagine we'll be talking about cuts yet, because we shouldn't be talking about it. Everything we've seen in recent weeks is the opposite direction, so no cuts this year.” I didn't expect it.”
Euro zone core inflation rose to 2.9% in December from 2.4% in the previous month, largely on the back of energy prices. The ECB is targeting inflation at 2%.
“Until we see a clear decline toward 2%, we can't make any announcement when we're going to cut,” Holzmann said.
Holzman was recently elected as one of the governing board members Census By Intouch Capital Markets.
He also flagged the “overwhelming problem” of geopolitical shifts in the Middle East as the Israel-Hamas war continues and tensions expand to include Lebanon's Hezbollah and Yemen's Houthis.
“Prices may increase on a day-to-day basis, but there is also the risk of changing the way we do business, structural changes, which will take more time, but there is also the risk of price changes in the future. If both come together, our current outlook is [for] “December will be worse, and it will take longer to bring prices down,” Holzman said.
