“Recent data shows a lack of further progress on the inflation front,” Federal Reserve Governor Jerome Powell said on Tuesday. – To have confidence in a sustainable decline in inflation towards the 2% target (level considered optimal by the Fed, ed.) “it will probably take more time” says Powell, underlining that […]
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“Recent data shows a lack of further progress on the inflation front,” the governor of the Federal Reserve, the US central bank, said on Tuesday, Jerome Powell. – To have confidence in a sustainable decline in inflation towards the 2% target (level considered optimal by the Fed, ed) “it will probably take more time,” Powell says, stressing that it is “appropriate” to give monetary policy more time to work. The governor has long signaled that the Fed will only be ready to cut rates when he has more confidence on a decline in inflation. His words today seem to indicate a desire to keep rates high for a long time longer period of light than expected of persistent inflation.
Just before Powell, the president of the European Central Bank, spoke Christine Lagarde he had specified that “The ECB does not depend on the Fed, it depends on the data and we must decide on these”. referring to the next monetary policy moves with a rate cut almost certain in June. “We are looking at a disinflationary process. If it moves in line with our expectations we are moving towards a time when we can moderate” monetary policy as long as there are no further shocks”, added Lagarde. The road to inflation at the 2% target is “bumpy”, the president then explained. “Geopolitical developments have been with us for a long time and have an impact on commodity prices. In Europe they started with Russia’s war in Ukraine. We monitor the trend of oil prices very closely.
The ECB Governing Council “will cut interest rates for the first time in June, provided no shocks occur before then”, reiterates Francois Villeroy de Galhau, member of the Governing Council of the ECB. “If there are no major shocks or surprises, we should decide on a first rate cut at the beginning of June,” said the governor of the Banque de France. According to the governor, after this first cut, the ECB will be led by a “pragmatic and agile gradualism”adding that “we will of course monitor the potential impact of developments in the Middle East.”
Tags: Powell Fed freezes markets Longer expected cuts Lagarde surprises ECB cut June
 freezes the markets: “Longer than expected for cuts”. Lagarde: “If there are no surprises the ECB will cut in June”){kind=link}