ECB personnel "need to cut interest rates regardless of Fed"

ECB officials have indicated they will cut the ECB policy rate regardless of the U.S. Federal Reserve's decision on the benchmark rate.

"The ECB is not the Fed's 13th bank," Finland's central bank governor Ollie Ren said in an interview on Bloomberg TV on the 13th local time, adding that interest rates are determined based on the mission of stabilizing prices in the 20 countries that use the euro.Governor

Ren said it was reasonable to continue cutting interest rates at a time when inflation was on track and growth prospects were weakened.

Croatia's central bank governor Boris Vujic also said in a media interview that the ECB does not rely on the Fed or any other central bank, adding that the market's short-term expectations of a rate cut seem justified.

Both figures are categorized as hawks within the ECB who favor monetary tightening.

The remarks are interpreted as a sign that the U.S. Federal Reserve will maintain a gradual rate cut despite the Fed's theory of controlling the pace of rate cuts, the resulting widening gap between the Fed and the ECB's benchmark interest rates, and the euro's depreciation.

The market had been expecting the ECB deposit rate, currently at 3.00% per annum, to be cut to around 2.00% in June this year.

However, the deposit rate forecast jumped to 2.20% in July this year as the Fed's recent outlook for a rate cut was reduced and concerns over inflation reigniting in Europe also grew.