The sources confirmed that July will serve as a break and stabilization of interest and that the focus will be on September for the second interest rate cut, as the ECB governors consider that a cut in July is unlikely.
The summary of the press conference of ECB President Christian Lagarde was as follows:
- In October 2022 inflation peaked in double digits, but by September 2023, it had fallen to 5.2%, and currently stands at 2.6%.
- Lagarde stressed the need for more data to confirm the deflationary trajectory.
- Although wages are still high, there are signs that they have been declining recently.
- The ECB has to take into account the variation in wages between countries and the impact of this on the prices of services.
- Lagarde also stated that the market pricing of interest rate cuts is independent of the ECB's decisions.
- The ECB is committed to returning inflation to the 2% target in the medium term.
- The decision to ease the restrictive position came almost unanimously, with the exception of one conservative.
- The ECB will continue to take a serious approach to fighting inflation, and will remain restrained until the 2% target is achieved.
- Lagarde stressed that the ECB is far from reaching the neutral rate, which remains a key goal.
Holzman was reportedly the only defector.
