MNI BRIEF: ECB Should Cut, Remain Gradual, Data Focused-Kazaks

MNI (LONDON) - The European Central Bank should cut rates when it meets in December, but policy adjustment should remain gradual and data-dependent, Bank of Latvia Governor Martins Kazaks told an MNI Connect event Tuesday, though he accepted policymakers needed to remain both "agile and flexible" if needed. (See MNI SOURCES: ECB Heads For 25BP Cut; Risks From Trump, Germany )

Kazaks, who sits on the ECB's Governing Council, noted the risks still outstanding for the eurozone economy, not least potential U.S. tariffs. However, he said the ECB needed to react to actually policy decisions from Washington, "not policy expectations."

Kazaks saw little current risk of an immediate inflation undershoot, with more uncertainty beyond two and three years in the forecast horizon. (See MNI SOURCES: ECB Closer To Dropping "Restrictive" Language )