The President of the ECB said she wanted to maintain “sufficiently restrictive policies” to ensure inflation slowed before considering further rate cuts.
The ECB offers a slight breath of fresh air to economic players. The Frankfurt institution began this Thursday to lower its key rates by 0.25 points. But in an economic context still full of uncertainties, she gave no indication on the continuation of the new cycle of rate cuts, continuing to affirm that this will depend on the economic data available meeting after meeting.
Questioned on this subject, the President of the ECB, Christine Lagarde, was particularly cautious and spoke of the coming “hectic” months in terms of inflation:
“We will continue to maintain our policies sufficiently restrictive to achieve the “objective” of ensuring the return of inflation to its medium-term objective of 2% as soon as possible,” she said.
As a reminder, inflation in the euro zone stood at 2.6% in May over one year.
The speed and duration of future rate cuts by the European Central Bank (ECB) are therefore still “very uncertain”, she warned: “It is a process which is underway (…), which What is uncertain is how fast we will go, and how long it will take.”
Christine Lagarde does not “confirm the relaxation process”
“We are not committing in advance to a particular rate trajectory,” warned Christine Lagarde, insisting that “decisions relating to key rates will be based on the inflation outlook taking into account economic and financial data, the dynamics of underlying inflation and the strength of monetary policy transmission.
The President of the ECB only indicated that the day’s decision aimed to “moderate the level of restrictions” implemented. On the other hand, she said she did not know “how long” the easing process would take and even said she could not “confirm that we are in this easing process”, even if “there is a high probability” . But “we need to have enough data” on disinflation, she said.
