What Did Lagarde Say Following the ECB's Interest Rate Decision?

European Central Bank (ECB) President Christine Lagarde commented following the bank's interest rate cut decision. Lagarde stated that the three main interest rates have been reduced by 25 basis points to maintain inflation at a sustainable level. She expressed that this move is based on assessments of the current inflation outlook and the effectiveness of monetary policies.

Lagarde indicated that they expect inflation to be 2.4% in 2024 and 2.1% in 2025. She emphasized that inflation rates, excluding energy and food, have remained somewhat higher, but are expected to reach a sustainable level consistent with the 2% target in the long term. Noting that the recovery in domestic demand may take time, Lagarde mentioned that this process will be managed carefully.

"Economic recovery may take time" Lagarde highlighted that economic growth is below expectations, indicating that the recovery in domestic demand and investment spending may take longer. Under current conditions, she noted that interest rate cuts have made new borrowing more attractive, while stressing the importance of maintaining financial stability. The ECB President pointed out the resilience of the banking sector and underscored the importance of macroprudential policies against potential risks.

She declared that the ECB is ready to use all available tools to bring inflation to the target, if necessary. Lagarde asserted that decisions will be made based on economic and financial data, with constant evaluation of market conditions. She reaffirmed that this meticulous approach to controlling inflation is supportive of economic growth.