• ECB hawk Robert Holzmann pushes back against further rate cuts in April.
  • The stance follows March's 25 basis point reduction to 2.50% deposit rate.
  • Diverging views emerge within ECB as inflation nears target but risks persist.

A Hawkish Stand Against the Tide

European Central Bank Governing Council member Robert Holzmann has drawn a line in the sand, telling reporters he wouldn't support additional interest rate cuts at the April meeting. The Austrian central banker's resistance comes just weeks after the ECB delivered its sixth consecutive 25 basis point reduction, bringing the deposit facility rate to 2.50%.

"The easing cycle has room to run, but not at every meeting," Holzmann was quoted as saying, pointing to what he called "persistent upside risks" from geopolitical tensions and potential fiscal stimulus measures across Europe. His comments put him at odds with market expectations pricing in a pause in April followed by another cut in June.

The Inflation-Growth Tightrope

While euro area inflation continues its descent toward the 2% target - with projections showing 2.3% for 2025 - growth forecasts tell a different story. The ECB recently revised down its 2025 GDP outlook to just 0.9%, creating what one Frankfurt-based analyst described as "the classic central banker's dilemma."

Holzmann's caution reflects concerns that recent developments - including trade tensions with the Trump administration and planned defense spending increases - could reignite price pressures. "We're not out of the woods yet," he reportedly said when questioned about declaring victory over inflation.

The Committee's Diverging Views

The public dissent highlights growing divisions within the Governing Council. Executive Board member Isabel Schnabel recently suggested monetary policy should no longer be considered "clearly restrictive," while others argue the weak growth outlook warrants continued easing.

Market participants will scrutinize upcoming wage growth data and the ECB's own lending survey for clues about the April decision. As one Milan-based trader put it: "Holzmann might be alone on this hill now, but if the data turns, others could join him quickly."