Lagarde’s comments at ECB press conference by Reuters

FRANKFURT (Reuters) – The European Central Bank cut interest rates for the fourth time this year on Thursday and kept the door open for further easing in 2025, with growth hurt by political instability at home and the risk of a new trade war with the United States. US.

Below are the highlights of European Central Bank President Christine Lagarde’s statements at a press conference after the policy meeting.

The trend is clear

“The direction of travel – currently – is very clear…. Clearly a lot of ground has been covered.”

Impact of tariffs

“The overall impact on inflation (of the tariffs) is uncertain… (It’s) a very complex situation with moving parts.”

Uncertain expectations

“If there is one thing we have discussed in the last few days it is the level of uncertainty we face.”

Neutral price

“But have we discussed the neutral rate in the last two days? No.”

Inflation formation

“We really want to see a change in the composition of inflation so that we can feel quite confident that we are getting close to the target.”

Inflation risks are two-sided

“The risks to inflation…are more two-sided than they were before.”

Inflation is on track

“We had a board meeting which was the last one in 2024 which really led us to recognize, that the victory over inflation had not yet been achieved, the mission had not been accomplished yet, but it certainly led us to recognize that inflation was actually on the right track in terms of getting to Our target is 2% in the medium term.

“And you know that gave us a level of confidence to actually make a decision on the cut and determine the appropriate cut, which is, in our view, 25 basis points. All the board members agreed to that proposal.”

In discussing this month’s interest rate cut

“There have been some discussions…to look at the possibility of a 50 basis point hike, but the general agreement that everyone agrees on is that 25 basis points is actually the right decision.”

Inflation target

He added, “In 2025, we will reach 2%, and this is clearly reflected in our expectations.”

Inflation risk

“Upside risks to inflation also stem from escalating geopolitical tensions, which could push energy prices and shipping costs higher and disrupt global trade. Moreover, extreme weather events and the climate crisis unfolding more broadly could push food prices up by more It is expected.

“In contrast, inflation could surprise on the downside if lower confidence and concerns about geopolitical events prevent consumption and investment from recovering as quickly as expected, if monetary policy weakens demand more than expected, or if the economic environment in the rest of the world worsens.” Unexpectedly.

“Greater friction in global trade would make eurozone inflation expectations more uncertain.”

Trade risks

“The risk of greater friction in global trade could impact euro area growth by reducing exports and weakening the global economy.”

About inflation

“We expect inflation to fluctuate around its current level in the near term, as previous sharp declines in energy prices continue to fall below annual rates. It should then stabilize sustainably at around 2% of the average target.”

Growth risks

“The risks to economic growth remain tilted to the downside.”

Underlying inflation

“Core inflation is broadly developing in line with inflation’s continued return to target.”

Trade tensions

He added, “Providing credit at reasonable prices would boost consumption, provided that trade tensions do not escalate.”

economy to boost

“The economy should strengthen over time, although slower than previously expected.”

Failure to adhere to the price path

“We are determined to ensure that inflation is sustainably stable at our 2% target over the medium term. We will take a data- and meeting-driven approach to determine the appropriate monetary policy stance.

“In particular, our decisions on interest rates will depend on our assessment of inflation expectations in light of incoming economic and financial data, the dynamics of core inflation and the strength of monetary policy transmission.

“We are not committed to a specific price path.”

batch

“(Growth) is losing momentum.”

(Reuters Global News Bureau)