WASHINGTON, April 19 (Reuters) - The European Central Bank is likely to cut interest rates multiple times this year, with back-to-back moves in June and July one possible option, ECB policymaker Pierre Wunsch said on Friday.
The ECB has clearly signalled it will likely start reducing its policy rate from a record high of 4% at its June 6 meeting but the road further ahead has been made more uncertain by strong U.S. inflation data.
Wunsch, who often expressed relatively hawkish views in the past, said a June cut was all but certain and it was unlikely to be the ECB's only this year.
"If a rate cut in July would also happen remains to be seen. I would not exclude it but there is a lot of uncertainty making it difficult to forecast," the Belgian central bank governor told Reuters in an interview.
"I don’t really have a base case but it’s very unlikely we will only cut by 25 basis points in 2024," he said on the sidelines of the International Monetary Fund and World Bank spring meetings.
Traders have pared back their bets on ECB rate cuts this year to three at most after stronger-than-expected U.S. price growth caused a rethink at the Federal Reserve.
Wunsch said the euro zone and U.S. economies had "decoupled" and the gap between the ECB and Fed's interest rates may widen.
"It doesn’t derail the baseline but we have to pay attention to it," he said, citing the euro's exchange rate and higher global growth as transmission channels to euro zone inflation.
ECB President Christine Lagarde told peers from the rest of the world gathering in Washington on Friday that the ECB would cut rates in June if data allowed but it was "not pre-committing to a particular rate path". (Reporting By Francesco Canepa; Editing by Andrea Ricci)
