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ECB's Schnabel sets bar 'very high' for rate cut as economy holds up

BY Reuters | ECONOMIC | 07/11/25 03:43 AM EDT

FRANKFURT, July 11 (Reuters) - The hurdle for another interest rate cut by the European Central Bank is "very high" as the euro zone economy is holding up better than expected and inflation is moored at 2%, ECB board member Isabel Schnabel said in an interview published on Friday.

"Inflation is projected to be at 2% and inflation expectations are well anchored," Schnabel told financial newswire Econonostream. "In view of this, our interest rates are also in a good place, and the bar for another rate cut is very high." (Reporting by Francesco Canepa; Editing by Alison Williams)

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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.

Before investing, consider the funds' investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.

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