European Central Bank President Christine Lagarde said on Tuesday that the central bank is on track to cut interest rates in the near term, unless there are major shocks.
“We are watching the disinflation process that is going as we expect,” Lagarde told CNBC on the sidelines of the IMF’s spring meetings. “We just need more confidence in the disinflation process, but if it goes as expected and there are no shocks, then we are heading to the point where we need to ease monetary policy.”
Lagarde's comments came after the European Central Bank gave clear signals that it might start cutting interest rates at its June meeting.
The European Central Bank held interest rates steady for the fifth time in a row at its meeting last Thursday, but indicated that slowing inflation meant it could start cutting rates soon.
Asked about the central bank's confidence in continued decline in inflation following the rise in commodity prices, especially the possibility of a jump in oil prices amid geopolitical tensions, Lagarde said that all commodity prices have an impact and that they will monitor the movements of those prices closely.
