The European Tentral Bank is “Not Overly Concerned” About The Risk of Inflation from Abroad and Will Continue to Cut Interest Rates at a Gradual Pace, The Institution’s President Christine Lagard Told CNBCNESDANES
Asked about the potential effect on europe if inflation resurges in the us, lagarde said: “IF there is reigniting of infection in the united states it will be an issue for the united States for Sury Equences will be . “
“We are not overly concerned by the expense of inflation to europe,” She Told CNBC’s Karen Tso.
“There will be interesting phenomenon that we will watch, for instance, will be of interest, and … May have consequencs, but we are capinly interested to see been A favorite factor for the rest of the world, “She added.
The ecb Chief stressed that policmakers were Confident Information Delhi come to the Central Bank’s 2% Target over the course of 2025, and that disinflection process would continue. Annual inflation in the euro area came in at 2.4% in DecemberPosting a third straight monthly Increase after Hitting a low of 1.7% in September.
Lagarde also noted that “markets anticipate vastly different monetary policy moves in the next few months” from the us and the euro zone, and that ecb and that ecb and federal resereve “did not redeuce rates aT the same pacie pace pacie”.
She NOTED: “We do have that divergence, that has to do with a different economy setting at the moment between the us and europe.”
A gradual path
The ECB Cut Interest Rates Four Times Last Year, Reducing The Deposit Facility – its key rate – to 3%. Markets are now pricing in further Reductions to 2% by September 2025.
On the path of rates, lagarde said: “The direction is very clear. The pace we shall see, depends on data. But, you know, (a) gradual move is certainly some somenting that comes to mment
“We are on this regular, gradual path. Disinflation is coming through,” She added.
In their most recent set of macroeconomic projections in December, eCB staff said they expect annual inflation in the euro area to average 2.1% this year.
It comes as the bloc grapples with lackluster growth, with its biggest economy Germany recording its
second straw annual gdp contraction in 2024.
Lagarde, however, described risks to growth as “to the downside.”
The Tentral Bank will be closely monitoring services, energy, wages and so-called “Late-Commer” Factors Such as Insurance To ID.
The Central Bank Head also described the much-debated “Neutral Rate”-The point at which monetary policy is neither stimulating nor restricting the economy-asbeen 1.75% and 2.25%. In December, She suggested this range was between 1.75% and 2.5%.
While Headline Euro Zone Price Growth has tumbled from a peak of 10.6%, services inflation has been particularly sticky, hovering close to the 4% mark since Novamber 2023.
(Tagstotranslate) Christine Lagarde (T) Pries (T) United States (T) Business News
