ECB, Lagarde sees the first rate cut in June “if forecasts are confirmed”. Then the data will lead

ROME – The President of the European Central Bank, Christine Lagardeat the opening of the conference ‘The ECB and its Watchers’ in Frankfurt, talks about inflation and cuts in the cost of money, confirming the scenario of a first intervention in June but clarifying that the Eurotower cannot immediately commit to a table of march for the months to come: the choices will gradually be guided by the data emerging from the macroeconomic front.

“In the coming months we will receive more data, which will help us evaluate whether we are sufficiently confident in the path ahead to move to the next phase of our monetary policy cycle,” Lagarde said at the annual conference. “We cannot commit, as tempting as this may be, to a predetermined path of interest rate reduction if we are consistent with our data-driven approach. and from time to time and we have discipline in pursuing it.”

There is anticipation for what will happen in April and June

Lagarde explained: “After our last Board of Directors meeting I stated that, as regards data relevant to our political decisions, we’ll know more by April and much more by June. If these data reveal a sufficient degree of alignment between the path of underlying inflation and our projections, and assuming transmission remains strong, we will be able to move into the easing phase of our monetary policy cycle and adopt a less restrictive policy“. But for Lagarde the attention must remain high: “Although inflation has slowed, uncertainty remains about its persistence, since There will be a period in June where we will need to continually confirm that the data supports the inflation outlook“.

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The right direction of monetary policy

And again: “La transmission of our monetary policy is proceeding in the right direction. The financing conditions have reacted strongly to the increase in interest ratesdemand for loans has weakened and, in turn, activity has slowed significantly especially in the most rate-sensitive economic sectors.” “Underlying inflation is decreasing in broad terms almost all the measures we monitor are decreasing and the range of values ​​between the different measures has reduced from a maximum of 4.1 percentage points to the current 2.4 percentage points – he added – some measures of underlying inflation with the best properties as a leading indicator of future inflation have seen a marked decrease. At the same time, domestic price pressures remain strong.”