ECB's Panetta Signals Growing Consensus for June Rate Cut

European Central Bank (ECB) Governing Council member Fabio Panetta has indicated that the conditions are in place for an interest-rate cut at the ECB's next meeting on June 6. Panetta, who is also the Bank of Italy governor, stated that there is a growing consensus within the ECB regarding the necessity of this rate reduction due to decreasing inflation across major economic areas and reduced risks to financial stability.

Support for the rate cut appears to be widening, with previously skeptical members beginning to agree with the proposed change in monetary policy. Bundesbank President Joachim Nagel has suggested that the ECB should be in a position to implement the rate cut, noting that wage growth across the 20-nation currency bloc is not a significant concern. In related discussions, G7 ministers and central bankers conducted a stress test on the performance of major industrial democracies in response to cyber shocks, which yielded satisfactory results.