An ECB member warns that markets may be moving too quickly on rate cuts and could ultimately harm themselves.

• Officials from the European Central Bank have mostly opposed predictions that interest rate reductions will begin in the spring.
• On Monday, Robert Holzmann, the head of the Austrian central bank and an ECB arch-hawk, informed CNBC that there are risks to the inflation outlook that could prevent interest rates from decreasing at all in 2021.

Klaas Knot, the president of the Dutch central bank, stated on CNBC Wednesday that markets are "anticipating rate cuts" too quickly.

Knot, a European Central Bank member, stated at the World Economic Forum in Davos that the issue for us is that if we achieve a return of inflation to 2% in 2025, it might become self-defeating. However, for this to occur, a lot of factors must go well.

The assumed interest rate path in the projection has less easing than the current market pricing, which increases the risk of becoming self-defeating.

The euro zone's central bank stated that it considers overall financial conditions and believes that "the more easing the market has already done for us, the less likely we will cut rates."

Our policy rate movements are not expected to align with current market expectations, and once this becomes clear, I anticipate a correction back to the interest rate path that we were optimistic about for a gradual return to 2% inflation in 2025.

Officials from the European Central Bank at this year's Davos have mostly rejected market predictions that interest rate cuts will begin in the spring.

On Monday, Robert Holzmann, the head of the Austrian central bank and an ECB arch-hawk, informed CNBC that there are risks to the inflation outlook that could prevent interest rates from decreasing at all in 2021.

Mario Centeno, Portugal's central bank governor, presented an optimistic outlook on the inflation trend.

The ECB will maintain its plan to reduce inflation despite challenges from a tight labor market and geopolitical uncertainty in the Red Sea, according to Knot.

He stated that any relaxation of current restrictions would be a gradual process, not a sudden withdrawal. He emphasized the need for more data on wages before making any changes.

The ECB's key rate is currently at a record high of 4%, and Knot did not agree with those who say that no further rate hikes will be needed.

He stated that the manifestation of upside risks to inflation would prolong the time that interest rates are held higher.

He stated that the first cut may occur later than expected, as it might suggest.