European Central Bank President Christine Lagarde stated the institution is not overly concerned about inflation risks from abroad and will continue to gradually lower interest rates. She emphasized the importance of US growth for the global economy and noted the diverging monetary policies between the US and Europe.
The European Central Bank (ECB) President Christine Lagarde expressed that the institution is not overly concerned about the potential for inflation stemming from external factors and will continue to gradually lower interest rates. Lagarde spoke to CNBC on Wednesday, stating that the ECB will closely observe various developments, including exchange rate fluctuations, which may have consequences. However, she emphasized the importance of U.S.
economic growth, as it has historically benefited the global economy. Lagarde addressed the potential impact on Europe if inflation resurges in the United States, stating that such a scenario would primarily affect the U.S. first and foremost. She acknowledged that there are interesting phenomena to watch, such as exchange rate movements, which could have implications. The ECB President highlighted the central bank's confidence in achieving its 2% inflation target by 2025, expecting the disinflation process to continue. She pointed out that markets anticipate distinct monetary policy paths for the U.S. and the euro zone in the coming months, due to differing economic conditions. The ECB and the Federal Reserve have not reduced rates at the same pace, leading to this divergence. The ECB has cut interest rates four times last year, reducing the deposit facility rate to 3%. Market forecasts suggest further reductions to 2% by September 2025, compared to a less than half-percentage point trim anticipated for the Federal Reserve over the same period. Lagarde stated that the direction of interest rate movements is clear, but the pace will depend on data. A gradual approach is currently considered. ECB staff projected annual inflation in the euro area to average 2.1% this year in their December macroeconomic projections, noting that progress on disinflation is on track. The central bank will closely monitor services, energy, wages, and late-comer factors like insurance to assess whether early 2025 delivers the anticipated gradual reduction in service prices. Lagarde also defined the neutral rate, the point where monetary policy neither stimulates nor restricts the economy, as between 1.75% and 2.25%. While headline euro zone price growth has declined from a peak of 10.6%, services inflation has remained stubbornly high, hovering close to 4% since November 2023
European Central Bank Inflation Interest Rates Christine Lagarde Monetary Policy US Economy Euro Zone
United States Latest News, United States Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
ECB Not Overly Concerned About Global Inflation, Lagarde SaysEuropean Central Bank President Christine Lagarde stated that the institution is not overly concerned about the impact of inflation outside the euro zone during an interview with CNBC. She emphasized that the ECB is closely monitoring key economic indicators and remains confident in achieving its 2% inflation target by 2025.
Read more »
Putin: Russia-China Ties 'Self-Sufficient', Unfazed by Global EventsRussian President Vladimir Putin and his Chinese counterpart Xi Jinping held a video conference, emphasizing the strength and independence of their bilateral relations. Putin stated that the cooperation between Moscow and Beijing is firmly rooted in shared interests and mutual trust, unaffected by domestic politics or the global landscape. Both leaders highlighted their commitment to a multipolar world order, advocating for international security and cooperation on platforms like the UN, SCO, G20, and APEC.
Read more »
ECB's Holzmann Signals Longer Wait for Rate Cuts After Inflation RiseEuropean Central Bank (ECB) Governing Council member Robert Holzmann indicated on Saturday that further interest rate reductions could be delayed due to a recent uptick in inflation. Holzmann pointed to rising energy prices and the potential for a weaker euro to contribute to inflationary pressures. While he doesn't foresee immediate rate hikes, he acknowledged the possibility of a slowdown in global growth and associated inflation stemming from Trump's tariffs.
Read more »
ECB President Lagarde Projects 2% Inflation Target by 2025European Central Bank President Christine Lagarde expressed optimism about reaching the 2% inflation target by 2025, highlighting the significant progress made in 2024. Lagarde reaffirmed the ECB's commitment to achieving sustainable inflation stabilization.
Read more »
EUR/JPY Holds Steady Ahead of Inflation Data, ECB Rate Cut ExpectedThe EUR/JPY currency pair remains range-bound as investors await key inflation figures from Germany and the Eurozone. Market expectations are for a 25 basis point rate cut by the ECB this month, with potential for a larger reduction if inflation slows significantly. Japanese markets are closed for New Year holidays.
Read more »
Eurozone Inflation Re-Accelerates, But ECB Unlikely to Change StanceEurozone inflation rose to 2.4% in December, but analysts believe it's unlikely to influence the European Central Bank's dovish stance.
Read more »