ECB’s Lagarde says the brake is being eased off

Christine Lagarde, the President of the European Central Bank, recently spoke about the ongoing battle against rising inflation. She emphasized that while progress has been made, there is still work to be done to bring inflation under control. Lagarde highlighted the need to keep interest rates at a high level until price stability is achieved, even if the pedal is not pressed as hard as before.

The ECB recently lowered its key policy rate by 0.25 percentage points, with expectations of further rate cuts in the future. However, concerns have been raised about the impact of lowering interest rates on inflation, especially as the ECB’s target rate of price increase is two percent. Lagarde stressed the importance of vigilance, commitment, and tenacity in navigating the challenges ahead.

There are differing opinions on the impact of interest rate cuts on inflation, with some suggesting that the ECB’s decision to lower rates may be premature given the current inflation forecasts. Despite these concerns, the ECB is determined to continue its efforts to combat inflation and achieve price stability in the European economy.