The European Central Bank (ECB) may start cutting interest rates this summer, its president said today Christine Lagardehowever, warning that the relevant decision will depend on the latest economic data.
In an interview with Bloomberg Television in the DavosLagarde was asked about a scenario in which a majority of ECB Governing Council members favors a rate cut this summer, even in the run-up to the summer.
“I'd say it is too possibleLagarde said.
“But I have to stay cautious because we also say that we depend on the data and that there is still a degree of uncertainty and some indicators have not stabilized at the level that we would like to see them,” he added, however.
Lagarde stated that the inflation is “on track”, but it is still too early to declare victory. “Employees lost purchasing power during the years 2021 and 2022 and there is now a tendency in the negotiations taking place to regain this power,” explained Lagarde.
The salary negotiations will have an impact on inflation, which has slowed in recent months, and the ECB expects “to know more about this (…) in April or May” to decide on a possible easing of its monetary policy, the president of the institution explained.
The interest rates they have certainly “peaked”, but “we must maintain a restrictive policy for as long as necessary to ensure that we reach a situation where inflation does not exceed 2% in the medium term”.
“The danger could be that we move too quickly and have to go back to a tighter tightening because we will have destroyed the efforts that everyone has put in over the last fifteen months,” he warned.
In the meantime, Mr World Trade Organization is “less optimistic” about world trade this year, its secretary-general, Ngozi Okonjo-Iweala, said today in Davos, citing mainly “the worsening of geopolitical tensions, the problems we see in the Red Sea, in the Suez Canal , in the Panama Canal”.
In early October, shortly before the Hamas attack on Israel, the World Trade Organization had already revised its forecasts far down for 2023, saying it expected the volume of global merchandise trade to grow by only 0.8 %. This year, however, he expects a 3.3% recovery.
Source: News Beast
With 6 years of experience, I bring to the table captivating and informative writing in the world news category. My expertise covers a range of industries, including tourism, technology, forex and stocks. From brief social media posts to in-depth articles, I am dedicated to creating compelling content for various platforms.
