Interview with Isabel Schnabel, Member of the Executive Board of the ECB, conducted by David Barwick and Marta Vilar on 9 July 2025

11 July 2025

Ms Schnabel, abstracting from the still-open question of tariffs, would you say that developments since 5 June support the idea that the ECB is in a good place, weakening the case for another move?

Yes, we are in a good place. Disinflation is proceeding broadly as expected, even if services inflation and food inflation remain somewhat elevated. We are now close to having successfully tackled past inflation shocks, which is good news. Over the medium term, inflation is projected to be at 2% and inflation expectations are well anchored. In view of this, our interest rates are also in a good place, and the bar for another rate cut is very high.

Let me explain. First, I see no risk of a sustained undershooting of inflation over the medium term. Core inflation is projected to be at target over the entire projection horizon. The low energy price…