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ECB Poised for Rate Cut Next Month, Lagarde Confirms

A rate cut is anticipated next month, Christine Lagarde said during an interview with an Irish network.

ECB Poised for Rate Cut Next Month, Lagarde Confirms

"There is a strong possibility as the data we receive reinforces the level of confidence we have in achieving 2% inflation in the medium term, which is our goal, our mission, our task," stated the head of the European Central Bank.

Lagarde expressed confidence in controlling inflation, saying, "I'm really confident that we have inflation under control. The forecast we have for next year and the year after that is actually very, very close to the target, if not the target. So I'm sure we've gone into a control phase."

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ECB officials are signaling a potential interest rate cut at the June meeting. The deposit rate, which has been at a record high of 4% since last autumn, is expected to be reduced by 0.25%. Investors are also pricing in another cut in September and anticipating a final move in December 2024.

The ECB board members, including Lagarde, are avoiding commitment to a specific interest rate path. Nonetheless, many have indicated that market expectations are aligning with their intentions.

Inflation in the eurozone has decelerated significantly but stalled at 2.4% in April. According to Bloomberg, it is unlikely to drop below the ECB's 2% target until the second half of next year.

Lagarde reiterated her focus, saying, "2%, 2%, 2% reduction in inflation. Mission accomplished. This is what I want to do."



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