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ECB not in a hurry to cut rates further, Lagarde says

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The European Central Bank needs more time to conclude that inflation is firmly on a path to 2% and benign economic developments indicate that rate cuts are not urgent, ECB President Christine Lagarde has said.

The ECB lowered rates for the first time in June after its most aggressive rate hike spree on record, but held back on committing to any subsequent moves, arguing that the outlook was far too uncertain to telegraph a second cut.

Christine Lagarde acknowledged this dilemma, warning that it was still not a given that the bloc would avoid a recession, despite a modest growth uptick last quarter. Growth indicators in recent weeks have come in on the weaker side of expectations, challenging a widely held view that a year and a half of economic stagnation was over and a recovery was taking hold.

They now price in between one and two more cuts this year and only four cuts between now and the end of 2025.

Business European Central Bank Inflation Interest Rates US Federal Reserve ECB President Christine Lagarde

 

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