FRANKFURT: The European Central Bank has time now to assess how inflation unfolds after a record string of rate hikes but victory has not yet been won and bets based on short term data flow are premature, ECB President Christine Lagarde said on Tuesday.
Inflation has dropped more than expected in the past several months, fuelling markets’ expectations that the ECB’s next move is set to be a rate cut and could come as soon as April, despite guidance from several policymakers about a more drawn out timeline.
“This is not the time to start declaring victory,” Lagarde said in a speech in Berlin. “We need to remain focused on bringing inflation back to our target, and not rush to premature conclusions based on short-term developments.”
Markets now expect the ECB’s next move to be a rate cut in either April or June and see more than 90 basis points of easing before the end of 2024.
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