"ECB Officials Warn Against Premature Rate Cuts Amid Inflation Impact and Economic Decline"

The European Central Bank's Chief Economist warned that inflation threats may prevent rate cuts this year, despite acknowledging the potential for an economic downturn. Geopolitical tensions, such as those in the Middle East, could disrupt energy markets and supply chains, impacting costs. Market expectations for rate cuts clash with the ECB's cautious approach, with concerns about the euro-area's economic slowdown and the potential for external factors to trigger a recession.