On October 17th at 20:15 Beijing time, the European Central Bank announced its third interest rate cut of the year, lowering the deposit rate by 25 basis points to 3.25%. The next decision of the European Central Bank will be implemented on December 12th.

Despite the downside risks to both economic growth and inflation, there is disagreement among ECB policymakers on whether to consider a significant 50 basis point rate cut in December.

Mario Centeno, member of the Governing Council of the European Central Bank and President of the Bank of Portugal, said: 'Of course, we can consider a 50 basis point rate cut because we still rely on data, and the data we have also suggests that such a possibility exists.'“

The Eurozone's inflation rate for September has recently been revised to 1.7%, lower than the previous official estimate of 1.8%. By comparison, the inflation rate in August was 2.2%.

September was the first month in the Eurozone where inflation fell below the European Central Bank's 2% target since June 2021, marking the end of years of excessive price growth and reinforcing expectations of further interest rate cuts in the near future.

European Central Bank President Lagarde stated last week that central bank policy makers only discussed the advantages of a 25 basis point rate cut at the meeting, rather than a larger 50 basis point rate cut.

Austrian Central Bank Governor Robert Holzmann said, "I am confident that some of my colleagues will support a significant interest rate cut, while others will not. As for me, I will say I will look at the data

Holzmann also stated that policy makers will inevitably present reasons for a larger interest rate cut in December, but he believes that the recent 25 basis point cut by the European Central Bank is a "precautionary" measure, and the central bank may still need to take interest rate cuts. Maintain stability at the end of the year.

He said, "If things are really as bad as some people claim, we can cut interest rates by another 25 basis points, but if we cut interest rates by 50 basis points, based on economic data, I don't think so

Klaas Knot and Centeno, members of the Governing Council of the European Central Bank in the Netherlands, have stated that they do not rule out the possibility of a 50 basis point interest rate cut at the ECB's December meeting. But he added that this move requires a certain degree of deterioration in the data.

Knot also said, "I think we are very confident in our goal of restoring inflation to 2% at some point next year

He added, "I also want to say that I believe the risks surrounding this baseline have been reasonably controlled. Therefore, if this situation does happen, and if the December forecast continues to confirm this situation, then we will be able to gradually release the brakes and continue to cut interest rates until we reach the neutral zone, where we will no longer simulate the economy or slow down the pace of economic development

Gediminas Simkus, member of the Governing Council of the European Central Bank and Governor of the Bank of Lithuania, said, "We are clearly moving towards a loose monetary policy

He added, "So, at this point, I can say clearly that we will definitely see some interest rate cuts at the upcoming meeting. But the magnitude of the rate cuts or whether they happen will depend on the data

When asked if market participants are satisfied with the pricing of the European Central Bank's consecutive interest rate cuts around the middle of next year, Simkus said he is uneasy about calls for significant rate cuts.

He added, "You know, I don't think these significant interest rate cuts are justified to some extent unless we really see some unexpected and bad things in the data. So far, I don't think that's the case

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