ECB: Lagarde highlights uncertainty and gradual rate strategy
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The ECB cuts rates by 25 basis points, aiming for 2% inflation. Lagarde emphasizes political uncertainties and a data-driven approach without preset paths.
Rate Decision: A Unanimous Choice
The European Central Bank decided on a 25 basis point rate cut, deemed appropriate to keep inflation on track toward 2%. ECB President Christine Lagarde highlighted the institution’s commitment to monitoring economic data to guide further actions without adhering to a fixed trajectory.
Inflation: Target Within Reach
Lagarde explained that inflation projections remain favorable, signaling a return to the 2% target in the medium term. However, she noted that inflation risks, while more balanced, are still under careful observation.
Political and Fiscal Uncertainties
The ECB president pointed out challenges arising from political instability in some member states and fiscal uncertainty, exacerbated by delays in budget submissions from certain countries. She also mentioned potential global economic impacts stemming from events like the upcoming U.S. elections.
Monetary Policy Tools and Future Discussions
Lagarde clarified that the neutral rate and TPI were not discussed during recent meetings. She also noted that the PEPP is nearing its conclusion with the end of reinvestments, highlighting its crucial role during the pandemic.
Looking Ahead
The ECB remains focused on data-driven decisions, adopting a flexible approach to navigating a complex economic and political landscape. Lagarde confirmed that additional details on strategies will be outlined in the coming months.
Rate Decision: A Unanimous Choice
The European Central Bank decided on a 25 basis point rate cut, deemed appropriate to keep inflation on track toward 2%. ECB President Christine Lagarde highlighted the institution’s commitment to monitoring economic data to guide further actions without adhering to a fixed trajectory.
Inflation: Target Within Reach
Lagarde explained that inflation projections remain favorable, signaling a return to the 2% target in the medium term. However, she noted that inflation risks, while more balanced, are still under careful observation.
Political and Fiscal Uncertainties
The ECB president pointed out challenges arising from political instability in some member states and fiscal uncertainty, exacerbated by delays in budget submissions from certain countries. She also mentioned potential global economic impacts stemming from events like the upcoming U.S. elections.
Monetary Policy Tools and Future Discussions
Lagarde clarified that the neutral rate and TPI were not discussed during recent meetings. She also noted that the PEPP is nearing its conclusion with the end of reinvestments, highlighting its crucial role during the pandemic.
Looking Ahead
The ECB remains focused on data-driven decisions, adopting a flexible approach to navigating a complex economic and political landscape. Lagarde confirmed that additional details on strategies will be outlined in the coming months.