Investing.com -- The European Central Bank (ECB) may consider reducing interest rates below neutral, according to Olli Rehn, an ECB policymaker. Rehn, who also serves as Finland’s central bank governor, made the statement on Monday.

Rehn also pointed out that underlying price pressures were lessening. In addition, he noted that U.S. trade tariffs were primarily amplifying downside risks to inflation. The governor did not provide further specifics on the potential interest rate cut or its timing. The ECB’s move to maintain maximum flexibility comes amid a complex global economic landscape.

Rehn’s comments signal a potential shift in ECB policy, as central banks worldwide grapple with economic uncertainties. The potential rate cut could be seen as a proactive measure to counter potential economic downturns and manage inflation risks. However, the specifics of this potential policy change, including the extent of the rate cut and its implementation timeline, remain unclear.

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