ECB’s Lagarde: Hope to Reach 2% Target Before End of Next Year

22 October 2024

By David Barwick – WASHINGTON (Econostream) - European Central Bank President Christine Lagarde on Tuesday said that she hoped to see price stability in the euro area restored before the last quarter of next year and thus earlier than the ECB currently projects.

In an interview with Bloomberg, Lagarde was asked whether the ECB could reach its 2% target before 4Q 2025, as its September macroeconomic projections envisaged.

‘That would be my hope’, she said.

The latest inflation data had been ‘relatively reassuring’, she said.

‘We are all confident that 2025 is the year when we reach our target on a sustainable basis’, she said. ‘But we have to be attentive to everything. We have energy prices that are low at the moment relative to where they could be. We have services going slightly down, but not much. We are still at 3.9% in the last reading and we have to pay attention to domestic inflation.’

Lagarde refused to be drawn out on the likelihood of a larger rate cut.

‘You will have people the whole week saying, oh, it should be 50 [basis points], it should be 25’, she said. ‘No: direction of travel clear, pace to be determined on the basis of backward- and forward-looking element using the three criteria and applying judgment.’