TechFlow news, October 23 — According to Jinshi Data, conversations this week with six sources indicate that European Central Bank (ECB) policymakers have begun discussing whether rates need to fall enough to stimulate the economy, ending years of restrictive monetary policy. The ECB has been cutting interest rates rapidly this year, but until now policymakers have stated their goal is to reach a neutral policy stance—one where the central bank neither slows nor stimulates growth—hoping this would keep inflation stable.
Sources said reaching any consensus will still take considerable time, but the shift marks a significant change in policy discussions, potentially leading the central bank to cut rates earlier and more aggressively than currently expected. Some policymakers believe the ECB has fallen behind the curve and needs to ease rates more substantially than previously anticipated to prevent inflation from becoming too low. They are also calling on the ECB to re-evaluate its "meeting-by-meeting" policymaking guidance and stop referring to restrictive interest rates, signaling that the central bank is taking downside risks seriously.
