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ECB's Stournaras sees two quarter-point rate cuts in 2024, FT says

BY Reuters | ECONOMIC | 10/09/24 12:16 AM EDT

Oct 9 (Reuters) - European Central Bank (ECB) policymaker Yannis Stournaras is backing two interest rate cuts this year and expects further easing in 2025, he told the Financial Times in an interview published on Wednesday.

"Even if we have one cut of 25 basis points now and another one in December, we will be back to just 3 per cent - still in highly restrictive territory," Stournaras told the newspaper, referring to the ECB's main policy rate. (Reporting by Sameer Manekar in Bengaluru)

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In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

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