Lagarde said that with the rapid growth of inflation now largely under control, interest rate cuts next month are a probable event.
The Zhitong Finance App learned that ECB President Lagarde said that with rapid inflation growth now basically under control, interest rate cuts next month are a probable event.
In an interview with Ireland's RteOne TV station on Tuesday, Lagarde said, “If the data we receive enhances confidence, we will achieve a 2% inflation rate in the medium term, which is our goal, mission, and responsibility, then it is very likely that we will cut interest rates on June 6.”
She said, “I am very confident that inflation is under control now. Our predictions for next year will be very, very close to our goals, even if we don't meet them. So I believe we have entered the control phase.”
Officials' next move to formulate policies has been widely predicted. Deposit interest rates have been at an all-time high of 4% since the fall of last year, and are expected to be lowered by 25 basis points. Investors expect to cut interest rates by another 25 basis points in September, and tend to cut interest rates again in December.
Management committee members declined to promise a specific interest rate path, and Lagarde felt the same in an interview with RteOne. However, many say the market bet may be similar to their own ideas.
Bundesbank President Joachim Nagel (Joachim Nagel) also commented in a separate interview with the “Handelsblatt” (Handelsblatt) on Tuesday, urging caution after a possible first rate cut.
He said, “We should not cut interest rates hastily, jeopardizing the results already achieved.” Uncertainty “is still very high.”
Therefore, “even if the first interest rate in June does not mean that interest rates will be cut further at subsequent meetings,” Nagle said, “We are not autonomous driving.”
Lagarde also warned of uncertainty, but was more cautious.
“We have to rely on data,” she said. This is a collective decision made by all members of the Management Committee. It is difficult to define or predict the path after the first interest rate cut, if there is such a rate cut.”
Eurozone inflation has now slowed sharply, although inflation stagnated at 2.4% in April and will not retreat from the ECB's 2% target until the second half of next year.
Lagarde said her goal was to “reduce inflation by 2%. Task completed. That's what I wanted to do.”
The ECB president also defended the central bank's past decisions, “We haven't done a bad job,” although she mentioned the “three months early” option and acknowledged that 2022 rate hikes could begin sooner, and mentioned.
“We might start a little bit earlier,” she said. But I'm not sure how different the results would be.”