Lagarde: Inflation is under control, we can cut interest rates
European Central Bank President Christine Lagarde stated that a rate cut next month is likely as the rapid increase in consumer prices is now largely under control.
On the other hand, European Central Bank (ECB) President Christine Lagarde stated that an interest rate cut may be made next month as the rapid increase in consumer prices is now largely under control.
“If the data we get reinforces the level of confidence that we have – that we will achieve 2 percent inflation in the medium term, which is our target, our mission and our mandate, there is a strong possibility that we will make a move on June 6,” Lagarde said in a television interview broadcast on Ireland’s RTE One channel on Tuesday. . “I am really confident that we have inflation under control,” said Lagarde, adding, “The forecasts we made for next year and the year after that are really very close to the target and maybe on target. “Therefore, I am sure that we have moved on to the control phase,” he said.
While the ECB deposit rate, which has been at a record level of 4 percent since last autumn, is expected to be reduced by a quarter point at the next meeting, investors predict that another step of this magnitude will be taken in September and a final reduction will be made in December.
Speaking to Handelsblatt on Tuesday, Bundesbank President Joachim Nagel called for caution after the possible first reduction. “We should not lower interest rates hastily and jeopardize what we have achieved,” Nagel said, adding that uncertainty was “still high.” Nagel said, “Even if interest rates were reduced for the first time in June, this does not mean that we will reduce interest rates further in subsequent meetings. “We are not on autopilot.” said.