ECB’s Lagarde hints at potential interest rate cuts by summer: Davos 2024

European Central Bank (ECB) is likely to make interest rate cuts this summer, said president Christine Lagarde on Wednesday in an interview with Bloomberg TV at the World Economic Forum in Davos.

Questioned about the possibility of garnering majority support within the ECB for upcoming rate cuts as other policymakers showed support of such a move, Lagarde said: “I would say it’s likely too,”

“But I have to be reserved, because we are also saying that we are data dependent and that there is still a level of uncertainty and some indicators that are not anchored at the level where we would like to see them.”

The ECB president is joining many of her colleagues in seeking to damp expectations of imminent loosening while acknowledging that officials are on a path to ultimately cut borrowing costs. This is just a day before the start of the so-called quiet period that precedes ECB monetary-policy meetings.

“You’ve talked to some of them, they have spoken recently, and each of them has their view, which I respect completely,” Lagarde added.

“We generally coalesce towards the decisions that we make on the basis of data. Some of them have their local domestic data, they have their respective inflation rates, which are different from one country to the other.”