ECB President Christine Lagarde emphasized that the central bank is not yet ready to initiate rate cuts, underscoring the need for comprehensive data analysis
In a CNN interview overnight, she stated, “We are not there yet,” added that the decision to loosen monetary policy hinges on “all sorts of data”. She also singled out the significance of wage data as “critically important.”
Despite acknowledging a clear disinflationary trend, Lagarde noted that ECB requires a deeper understanding and progression into this trend to make a well-informed decision. “We are on a disinflationary trend — no question about it,” she confirmed, “But we need to be further into that process.”
Lagarde’s remarks also touched upon the consensus within the ECB regarding the direction of the next policy move. “I think we all agree that the next move” will be a cut, she said, aligning with the general anticipation of eventual rate reductions. However, the timing remains uncertain and subject to thorough examination of upcoming economic data.
A key factor in the timeline for interest rate cuts is the availability of wage growth data, which is not expected until after ECB’s April meeting. This positions the June meeting as a more likely juncture for the consideration of rate cuts.
