Pierre Wunsch, Governor of the National Bank of Belgium and a member of the ECB Governing Council, said on June 19 that the case for further rate hikes is weakening. He added that the ECB could cut rates if inflation dynamics shift, though a July hike remained under consideration.
The comments land barely a week after the ECB raised its deposit facility rate by 25 basis points to 2.25% on June 11, marking its first hike since 2023.
What the ECB is actually wrestling with
Services inflation hit 3.5% in May, and overall inflation projections for 2026 are averaging 3.0%. Wunsch emphasized a data-driven approach, acknowledging that geopolitical tensions involving Iran have been driving energy price volatility. The mention of second-round inflation effects is also telling: the ECB is watching whether higher prices are feeding into wage demands and broader cost structures, or whether the initial inflation impulse is fading on its own.
Why crypto cares about European interest rates
