ECB's Vujcic Advises Against Further Rate Moves Amid Inflation Concerns

European Central Bank (ECB) member Boris Vujcic warns against rushing further interest-rate moves, citing a "luxury to wait" for incoming data to determine future actions. Some colleagues have expressed concern about falling short of the 2% inflation target. Vujcic emphasizes that the ECB is in a "good position" with inflation and interest rates at 2%, and will consider new projections and data before its September meeting.

European Central Bank (ECB) member Boris Vujcic has advised against rushing further interest-rate moves, emphasizing the need to wait for incoming data to determine future actions. In an interview with Handelsblatt, Vujcic, one of the Governing Council's more hawkish members, stated that the ECB should not be overly concerned about temporary deviations from the 2% inflation target [1].

Vujcic acknowledged that the ECB is projecting inflation to be below the target for the next 18 months, with a return to 2% expected in 2027. He noted that the ECB has the "luxury to wait" and that incoming data will dictate whether further rate moves are necessary. Some of his colleagues, including Olli Rehn of Finland and François Villeroy de Galhau of France, have expressed concern about falling short of the 2% target for an extended period, especially if the euro strengthens further [1].

The ECB has reduced interest rates eight times in the past year, signaling that the easing campaign is nearing an end. With inflation at target and the economy resilient to various headwinds, investors anticipate a pause this month, but at least one more cut before year-end. Vujcic stated that the ECB is currently in a "good position" with both inflation and interest rates at 2%, and he emphasized that the central bank can wait for more data before making decisions [1].

Before the September meeting, the ECB will receive inflation numbers for July and August, gross domestic product data for the second quarter, and further information on monetary-policy transmission. Vujcic noted that these data points will provide more clarity on the ECB's next steps. He also mentioned that the ECB will consider market expectations for at least one more rate cut in 2025, but he emphasized that this does not guarantee that a cut will occur by the end of the year [1].

In a separate interview, ECB President Christine Lagarde echoed similar sentiments, stating that the current interest rate path is in a "good position" and that the bank remains committed to its medium-term inflation target of 2% [2]. Lagarde emphasized that the ECB will do "whatever it takes" to keep inflation at that level and will consider new data and projections before making any decisions [2].

Both Vujcic and Lagarde highlighted the ECB's commitment to maintaining price stability and emphasized the importance of waiting for incoming data to inform future monetary policy decisions. With inflation currently at the desired level, the ECB appears to be in a strong position to assess the economic landscape and make informed decisions about further rate moves.

References:
[1] https://www.bloomberg.com/news/articles/2025-07-08/ecb-mustn-t-rush-further-rate-moves-vujcic-tells-handelsblatt
[2] https://www.aa.com.tr/en/economy/european-central-bank-chief-says-interest-rate-path-in-good-position-committed-to-2-target/3621555