Isabel Schnabel, a member of the European Central Bank's Executive Board, stressed the importance of a cautious approach towards interest rate cuts. Speaking in Frankfurt, she stated that although disinflation is progressing, the fight against inflation is not yet complete.

Schnabel advised against hastily reducing borrowing costs below the neutral rate, suggesting that a gradual easing of policy restrictions remains the most appropriate strategy. Her remarks come amidst ongoing discussions about the ECB's monetary policy direction, underscoring the need for careful consideration before making further adjustments.

The central bank's focus remains on maintaining stability while navigating the complexities of the current economic landscape.