2024-03-20 10:03:48
European Central Bank President Christine Lagarde confirmed on Wednesday that June is the month in which policymakers will consider cutting interest rates.
“By June, we will have a new set of forecasts that will confirm whether the inflation path we predicted in our March forecast is still correct,” Lagarde said in a speech in Frankfurt.
Its message was generally very positive on the inflation path, despite growing geopolitical uncertainty and persistent domestic price pressures, especially from services.
“Unlike previous stages of our policy cycle, there are reasons to believe that the expected contractionary path will continue,” Lagarde said, stressing confidence in the latest set of staff macroeconomic forecasts, which expect inflation to average 2.3% in 2024, or 2% in 2017. 2025, and 1.9% in 2026.
- Fixing interest rates
The euro zone central bank has kept interest rates on hold since raising them to a record high in September. Until the March meeting, the bank’s message was that it was too early to discuss when to start cutting interest rates. It then meets in April and then June.
“It will judge its three criteria – inflation expectations, core inflation dynamics and the strength of monetary transmission – to gain enough confidence to start the contact phase once more in which we make policy less restrictive,” Lagarde said.
June has been rated as a key month by many members of the European Central Bank’s Governing Council, which votes on the path for interest rates. (agencies)
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