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ECB's Stournaras sees rates approaching 2% by year end, Trump tariffs could speed cuts

BY Reuters | ECONOMIC | 04:12 AM EST

Jan 22 (Reuters) - European Central Bank policymaker Yannis Stournaras expects the ECB to reduce interest rates gradually towards 2% by the end of 2025, and U.S. tariffs from the Trump administration could make faster cuts necessary, he said in an interview published on Wednesday.

"According to my personal estimation, (cuts) should be on the order of 25 basis points each time, so that by the end of 2025 we approach close to 2%, from the 3% where we are today," he said in an interview with Greek Naftemporiki newspaper published.

The possible imposition of tariffs by the U.S. could accelerate the reduction of interest rates as they could negatively impact the metrics of the European economy. (Reporting by Antonis Pothitos; Editing by Peter Graff)

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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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