European Central Bank President Christine Lagarde said an interest rate cut was possible next month as accelerating consumer price increases have now been largely contained.
“If the data we are receiving reinforces our confidence that we will get to 2% inflation over the medium term, which is our target, our mission, our duty, then there is a strong possibility that we will cut interest rates on June 6,” she said in a television interview with Ireland’s RTE One broadcast on Tuesday.
She added: I'm really confident that we have inflation under control. The projections that we have for next year and the year after are very close to the target, if not already there. So I'm confident that we have it under control.
It’s a widely heralded move by officials on upcoming monetary policy. Deposit rates, which have hit a record 4% since last fall, are expected to be cut by a quarter point, with investors pricing in another such move in September and also tipping the final move in 2024 in December.
Interest path is not specified
ECB Governing Council members are reluctant to commit to a specific path for interest rates, a sentiment echoed by Lagarde in an interview with RTE One. However, many have suggested that market bets may be similar to their thinking.
Eurozone inflation has slowed sharply, although it stood at 2.4% in April, and is not expected to fall back to the European Central Bank's 2% target until the second half of next year.
Lagarde reiterated that her goal is to bring inflation down to 2%, 2%, 2%. That's the job done. That's what I'm trying to do.
