![ECB can start cuts before Fed, says Finnish bank governor](https://www.berlinertageblatt.de/media/shared/articles/7a/dc/4b/ECB-can-start-cuts-before-Fed--says-135116.jpg)
-
Chinese qualifier Shang to face Thompson in ATP Atlanta semis
-
Concern grows as Venezuela blocks election observers
-
'Massive attack' on French rail threatens more chaos
-
'We did it!': France breathes sigh of relief after Olympics ceremony
-
Blinken, in Laos, set for talks with Chinese foreign minister
-
Regional concern grows as Venezuela blocks vote observers
-
Historic river parade, Dion show-stopper ignite Paris Olympics
-
Rainy Paris Olympic parade dampens many spectators' spirits
-
G20 pledges to work together to tax ultra-rich
-
The one of a kind Paris opening ceremony: five memorable moments
-
Justin Timberlake seeks to dismiss DUI case
-
Warner Brothers Discovery sues NBA over Amazon rights deal
-
Kobe Bryant locker, Maradona jersey up for auction in New York
-
Historic river parade launches Paris Olympics
-
Stocks rise as US inflation data boosts rate cut hopes
-
New York family of Holocaust victim reclaims Nazi-looted art
-
NASA Mars rover captures rock that could hold fossilized microbes
-
Thousands evacuate season's biggest wildfire in northern California
-
Sinaloa Cartel co-founder pleads not guilty after stunning US capture
-
Ethiopia mourns victims of landslide tragedy
-
Lady Gaga adds sparkle to star-studded Olympic show
-
Airbus and Boeing supremacy secure despite turbulence
-
Teams sail down Seine in rain-soaked Olympics opening ceremony
-
Norris hoping for more after topping Belgian practice times
-
West Indies' treble strike rocks England in third Test
-
Trump slams rivals as he meets Netanyahu in Florida
-
Olympic opening ceremony under way on River Seine
-
Mott's England future uncertain as ECB chief fails to offer support
-
Trump meets Israeli PM Netanyahu in Florida
-
S.African police say 95 Libyans detained at suspected military camp
-
Blinken set for talks with Chinese counterpart in Laos
-
Norris heads Piastri in McLaren one-two at Belgian GP practice
-
G20 seeks common ground on taxing super-rich
-
European medicines watchdog rejects new Alzheimer's drug
-
Harris gets vital Obama backing in battle against Trump
-
Habib, Ebden eye Alcaraz and Djokovic shocks at Olympics tennis
-
Stocks rise as inflation data boosts rate cut hopes
-
Long queues, ticketing problems ahead of Paris opening ceremony
-
Two Sinaloa Cartel leaders face US charges after stunning capture
-
Spain train driver jailed for 2.5 years over deadly 2013 crash
-
Paris poised for Olympic opening ceremony spectacular
-
Judoka fails doping test in first case at Paris Olympics
-
Holder and Da Silva keep England at bay after West Indies collapse
-
Alpine F1 boss Bruno Famin to leave in August
-
Ethiopia declares three days of mourning after landslide tragedy
-
Brazilian dunes dotted with dazzling pools make UNESCO heritage list
-
Rain, cooling slow huge blaze in Canada's Jasper park
-
French Rugby's Jaminet suspended 34 weeks after racist video: Federation
-
Osaka looking to turbo-charge comeback at Paris Olympics
-
Stock markets climb as US inflation rate drops
![ECB can start cuts before Fed, says Finnish bank governor](https://www.berlinertageblatt.de/media/shared/articles/7a/dc/4b/ECB-can-start-cuts-before-Fed--says-135116.jpg)
ECB can start cuts before Fed, says Finnish bank governor
The European Central Bank did not have to take its cues from the US Federal Reserve and could start to lower rates as soon as June, Bank of Finland governor Olli Rehn told AFP.
"While we don't make policy in a vacuum, the ECB is not the 13th Federal district of the US Federal Reserve," which is split into 12 zones, said Rehn.
"What the Fed does will not determine the case for a rate cut by the ECB," said Rehn.
When inflation began to climb upwards, the Fed was faster to respond than the ECB, kicking off a series of interest rate hikes in March 2022.
After some initial hesitation, ECB policymakers followed suit in July of that year, raising rates faster and farther than ever before in the history of the eurozone.
But with consumer prices now having come off the boil, it looks like European policymakers might be poised to move first to reduce borrowing costs at their next meeting in June.
Lingering inflation pressures in the United States have seen Fed policymakers back away from reducing rates again too soon.
But in the eurozone, the "declining trend" in inflation and "moderating wage growth" meant there was a "strong case for starting to ease monetary policy and cut rates in June", Rehn said.
- 'Small deviations' -
"Beyond that, let's see if the trend continues," said Rehn, who is one of 25 people on the ECB's governing council, which sets the course for interest rates in the eurozone.
Another cut at the ECB's meeting in July was far from a certainty for Rehn, who echoed statements made by many of his colleagues.
"We are not pre-committing to any rate path," Rehn said, an opinion shared by ECB President Christine Lagarde.
As for the Fed, observers should not pay "too much attention to possible small deviations in monetary stance" with the ECB's own decisions, said Rehn.
Concerns have been expressed that lowering rates first in the eurozone could lead to the depreciation of the euro relative to the dollar, potentially importing new inflation.
But the economic cycles in the United States and the eurozone could not be perfectly synchronised, "especially after such exceptional shocks that we have experienced", said Rehn in an allusion to turbulences caused by the coronavirus pandemic and the Russian invasion of Ukraine.
- More investment -
Growing differences in the economic development of the United States and Europe was a "major concern", however, Rehn said.
The United States has recorded stronger growth than the eurozone for 25 years, thanks to demographic advantages and bigger increases in productivity.
The price shock caused by Russia's 2022 invasion of Ukraine and the dwindling of gas supplies from the east also underlined Europe's dependence on Moscow for its energy imports.
"That's why the efforts toward green transition and digitalisation are so critical for Europe," Rehn said.
"We are under-investing for the moment in Europe and I'm very concerned about that because that's hampering our competitiveness," the central banker said.
O.Krause--BTB