Lagarde sees an interest rate drop in the summer of 2024 ‘likely’

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The interest rate in the Eurozone is currently 4.5%. While the ECB President has acknowledged the likelihood of a decline, she has stated that it will depend on the figures as “there is a degree of uncertainty”.

The President of the European Central Bank (ECB), Christine Lagarde, acknowledged in an interview at the World Economic Forum in Davos that it is likely that the institution she leads will reach a consensus to cut interest rates next summer.

Lagarde has opened himself up to this possibility, but has assured that it must be reserved because it depends on the data and there is still “a level of uncertainty and some indicators that are not anchored at the level at which we would like.”

Eurozone interest rates stand at 4.5%, after the ECB decided in December to keep them at this level for the second time in a row. Annual inflation in the eurozone rose by five-tenths to 2.9% in December. It is the first time that the ECB has set an estimated date for a possible rate cut and admitted that it could happen in 2024. So far, ECB representatives The Lagarde-led institution have limited themselves to ensuring that this would not happen until inflation was stable at around 2%.

According to the president, central banks and their policies are “on the right track” to keep inflation under control. However, he believes it is still too early to “declare victory.”

Also criticized market bets pointing to upcoming rate cuts. “It does not help our fight against inflation if expectations are so high that they are too high compared to what is likely to happen,” he said.

Source: EITB

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