European Central Bank President Christine Lagarde has signaled a potential interest rate cut in June, citing the need for more data on the euro zone economy and inflation. This comes after the ECB confirmed market expectations by keeping interest rates unchanged at a record low 4% for the fifth consecutive meeting.
Lagarde stressed the need to ease inflation and monitor risks, but declined to provide guidance on future interest rate trends. He noted that although inflation indicators are on the decline and wage increases are slowing, the service sector remains under pressure.
There is speculation as to whether the ECB's stance will be influenced by the Fed's approach, especially with rising US inflation. Lagarde maintained a cautious stance, emphasizing the differences between the eurozone and US economies.
Regarding the potential impact on the euro-dollar exchange rate and inflation, Lagarde said all data will be taken into account. Inflation in the euro zone slowed to 2.4% in March, moving closer to the ECB's 2% target, but rose to 3.5% in the United States, potentially leading to a Fed rate cut in September.
Despite these considerations, Ms. Lagarde reiterated the ECB's commitment to current monetary policy aimed at supporting the ongoing process of easing inflation. Future decisions will ensure that policy rates remain sufficiently accommodative for as long as necessary.
[With information sourced from Money Review GR]
