ECB’s Lagarde: June Data to Raise Confidence for First Rate Cut

20 March 2024

By Isabel Teles – FRANKFURT (Econostream) – European Central Bank President Christine Lagarde on Wednesday said that the ECB was not yet completely confident about the inflation path but that it would not wait forever and that the next months would bring more information to support a first rate cut in June.

Speaking at the conference The ECB and its Watchers, Lagarde said that ‘in the coming months, we expect to have two important pieces of evidence that could raise our confidence level sufficiently for a first policy move’, she said.

'[W]hen it comes to the data that is relevant for our policy decisions, we will know a bit more by April and a lot more by June', she said.

The first piece of data, related to wage growth, would be available by the end of May, and the second, the new set of projections, would be available in June, she observed.

'If these data reveal a sufficient degree of alignment between the path of underlying inflation and our projections, and assuming transmission remains strong, we will be able to move into the dialling back phase of our policy cycle and make policy less restrictive', she said.

'The transmission of our monetary policy is unfolding in the right direction', she said. 'Given the delays with which these data become available, we cannot wait until we have all the relevant information. To do so could risk being too late in adjusting policy.'