Headline: ECB/Centeno: Incoming Data to Dictate the Magnitude of Rate Moves

European Central Bank Governing Council member and Portuguese Central Bank President Mario Centeno stated that incoming data will determine the scope of the ECB's interest rate moves. Centeno, during a Q&A session following a speech at the Peterson Institute for International Economics, remarked, "Whether a rate cut will be 25 basis points or at some point 50, the data will tell us. If the data suggests it, I don't think the Governing Council will disregard a faster trajectory."

Centeno emphasized that the ECB operates based on data dependence and meeting-to-meeting decision-making principles. "Looking ahead, we see interest rates declining over the coming quarters and approaching levels very close to 2%, and the market is aligning with this expectation," he mentioned.

In response to a question about whether the speed of the ECB’s policy adjustments will be sufficient, Centeno replied, "The data will assist." He highlighted that the ECB took action in October, outside of a scheduled meeting, challenging the notion that it would act only with updated forecasts, calling this an "unwise idea."

"We need to act in a truly stable and predictable manner," Centeno stated, expressing his commitment to the baseline of their projections. "We foresee a soft landing and some recovery ahead," he added.

Nevertheless, Centeno emphasized the importance of the ECB communicating the issues identified around its baseline, noting that these issues are “primarily on the downside."

Regarding a potential monetary policy reaction if Donald Trump were to become the U.S. president again, Centeno downplayed it, saying, "I think we need to reassess this a bit, as it will not be permanent in some way."