(Bloomberg) -- Some European Central Bank officials deemed it appropriate to cut interest rates when they convened last month, an account of their monetary-policy meeting showed.

While a “very large majority” backed maintaining the deposit rate at 4%, some said the policy stance may have tightened in the seven months since hikes ended as slowing inflation stoked real rates, according to the account of the April 10-11 gathering that confirms Bloomberg reporting at the time.

“A few members felt sufficiently confident that the three elements of the Governing Council’s reaction function gave grounds for a reduction in the policy rates already at the present meeting,” the ECB said Friday. 

Policymakers are at odds over how quickly to lower borrowing costs after the planned initial decrease next month. The more hawkishly inclined want to proceed with caution as wage gains and volatile energy prices could yet revive price growth. Others say inflation is getting sufficiently close to 2% to allow three cuts in 2024.

Investors lean more toward that latter view, pricing in just over three quarter-point moves by December.

  • Click here for full account

Other key comments:

On Interest Rates

  • “A very large majority of members agreed with Mr. Lane’s proposal to maintain the three key ECB interest rates at their current levels
  • “In view of the sizable model and parameter uncertainty attached to such model-based constructs, the natural rate – while providing useful indications – was seen as being of limited use for day-to-day policymaking”
  • “Members stressed the value of waiting until June for further evidence confirming, or indicating a change to, the outlook, but also the value of taking into account any existing or new risks materializing by June, including renewed risks to inflation posed by a possible escalation of geopolitical tensions”

On Inflation and Wages

  • “Data dependence meant not overly focusing on one data point, as the path many indicators took was likely to be bumpy”
  • “Headline inflation, in particular, was expected to fluctuate around current levels in the near term and to decline again later on, suggesting that some bumpiness in the inflation profile was foreseen and consistent with a return of inflation to target by mid-2025”
  • “Members also generally concurred that further progress had been made regarding underlying inflation”

On the Economy

  • “Members assessed the risks to economic growth as remaining tilted to the downside. Growth could be lower if the effects of monetary policy turned out to be stronger than expected. A weaker world economy or a further slowdown in global trade would also weigh on euro area growth. Russia’s unjustified war against Ukraine and the tragic conflict in the Middle East were major sources of geopolitical risk. This might result in firms and households becoming less confident about the future and global trade being disrupted. Growth could be higher if inflation came down more quickly than expected and rising real incomes lifted spending more than anticipated, or if the world economy grew faster than expected”

On the Euro

  • “In any case, the depreciation of the euro following the release of the US inflation data pointed to a need for close monitoring of the impact of the exchange rate on euro area inflation”
  • “Spillovers from the US through a sustained exchange rate effect would likely slow the disinflationary process in the euro area. More generally, it was argued that the exchange rate effects would depend on the underlying shocks driving economic activity and inflation”

On Forecasts

  • “Members widely agreed that latest information broadly vindicated the growth and inflation outlooks entailed in the March 2024 staff projections. This indicated that the forecasting ability of the quarterly projection exercises had been restored”

©2024 Bloomberg L.P.