Inflation in the eurozone is currently on track to reach the 2% target by the end of next year, stated Christine Lagarde in an article for Rheinische Post.
The President of the European Central Bank (ECB), Christine Lagarde, following this week’s monetary policy easing, is downplaying expectations of further interest rate cuts in the near future, according to a report by DPA via TASR.
“Inflation in the eurozone is currently on track to reach the 2% target by the end of next year,” Lagarde stated in the Rheinische Post article.
“However, it will take some time to completely eliminate inflation from the economy. Until then, things won’t be smooth. We must be vigilant, determined, and persistent on this path,” said the ECB President.
Therefore, according to Lagarde, “interest rates must remain restrictive for as long as necessary to ensure long-term price stability.” She added that the ECB “needs to keep its foot on the brake a little longer, although not as firmly as before.”
Lagarde indicated that future ECB monetary policy decisions will depend on whether the ECB can achieve a timely return of inflation to the 2% target, whether price pressures in the eurozone economy ease, and whether monetary policy continues to effectively combat inflation: “These factors will determine when it will be time for further easing.”
On Thursday (June 6), the ECB eased monetary policy for the first time in nearly five years by cutting its main interest rates by 25 basis points. The reason for this move is the slowdown in the growth of consumer prices in the eurozone and the improvement in the inflation outlook.
