The divergence within the ECB regarding the direction of monetary policy is intensifying, with dovish officials such as Executive Committee member Chipollone seeing increasing reasons for another interest rate cut, while other decision-makers remain cautious. This divergence highlights the difficult choices faced by central banks in the context of ongoing uncertainty about the European economic outlook.

The dovish camp speaks out strongly

Executive Committee member Chipolone pointed out that the economic situation has changed since the March meeting, emphasizing that inflation is falling faster than expected and may achieve the inflation target ahead of schedule. Clearly stating that there is still room for further relaxation of monetary policy.

Greek Central Bank Governor Stonaras predicts a possible interest rate cut in April.

Cautious individuals remain vigilant

Irish central bank governor Mahlouf spoke on behalf of the centrists, emphasizing the need to remain cautious in the absence of inflation targets, pointing out that global special events may have a direct impact on inflation, and believing that the current exceptionally high uncertainty requires prudent action.

Policy background and latest developments

The European Central Bank has cut interest rates six times in a row since June last year, and has not provided clear policy guidance since its March meeting. There are significant differences in decision-making on the economic outlook, and the trend of inflation and the strength of economic recovery have become the focus of debate.

Summary: Difficult choices at the crossroads of monetary policy

The European Central Bank is standing at a critical crossroads in monetary policy, and the divergence between dovish and cautious factions reflects the complexity of the current economic environment. Although the slowdown in inflation provides a reason for continued easing, global uncertainty still poses significant risks. The future direction of policies will depend on the actual performance of inflation and economic data, and the outcome of this internal debate will profoundly affect the process of economic recovery in the eurozone. The market needs to closely monitor the fluctuations of various viewpoints before the April meeting.