After the first interest rate cut since 2019 by the European Central Bankthe president Christine Lagardespoke about the next steps, underlining that the banks will maintain “a data-dependent approach and will decide on a meeting-by-meeting basis.”
Inflation above 2% for much of 2025
«We are not bound to a pre-established path on rates”, said the president during the press conference after the decision on rates. “Based on an updated assessment of the inflation outlook, underlying inflation dynamics and the intensity of monetary policy transmission, it is now appropriate to moderate the degree of monetary policy tightening after nine months of unchanged interest rates.”
Despite the progress made in recent quarters, the President nevertheless once again placed the emphasis oninflation stressing that it “will likely remain above target until much of next year.”
The speed at which we will move remains uncertain
«We decided to cut rates because overall the trust on the future path of inflation has grown in recent months”, added the president of the ECB. “We stand ready to adjust all tools within our mandate to ensure that inflation returns to our medium-term target and to preserve the orderly functioning of the monetary policy transmission mechanism.”
The number one on the board then reiterated that the ECB will determine meeting after meeting level and duration appropriate of the restriction. “Our interest rate decisions will be based on our assessment of the inflation outlook in light of incoming economic and financial data, underlying inflation dynamics and the strength of monetary policy transmission,” Lagarde explained.
«We know the destination, we know the methodology, the volume of data we need to receive but the road remains uncertain as well as the speed to which we will move, we need data to confirm deflation trends”, added Lagarde, “I cannot confirm that we are in a process of returning” rates compared to the tightening that began in 2022″. (All rights reserved)
Posting time: 06/06/2024 14:47
Last update: 06/06/2024 15:41
