• Investing
  • Stock
  • Editor’s Pick
  • Economy
The Significant Deals
Editor's Pick

ECB’s Lagarde: we need to be cautious in cutting rates

by October 23, 2024
written by October 23, 2024

WASHINGTON (Reuters) – The European Central Bank will need to be cautious when deciding on further interest rate reductions and take its cue from incoming data, ECB President Christine Lagarde said on Wednesday.

Traders have ramped up bets on faster and potentially bigger rate cuts from the ECB after a host of policymakers warned about the risk of undershooting the central bank’s 2% inflation target – a remarkable change in tone after a two-year campaign to rein in prices.

Lagarde did not directly comment on the path for rates but she appeared to pour some cold water on market speculation.

“We need to be cautious because data will come up and will indicate to us what is the state of the economy, what is the state of inflation, of underlying inflation,” she told an event in Washington. “And there will be a judgmental aspect to our decisions, but we will indeed have to be cautious in doing so.”

Speaking at a separate event in Washington, where policymakers are gathered for the IMF/World Bank annual meetings, the ECB’s chief economist Philip Lane said he still expected a recovery in the euro zone’s economy even though “recent data raised some questions” about it.

The ECB cut its key interest rate by 25 basis points to 3.25% last week – its third cut this year. Policymakers are now debating how far interest rates may need to fall and how to signal their plans to investors.

Portuguese central banker Mario Centeno suggested rates could be cut by a larger 50 basis points at the bank’s next meeting on Dec 12.

“We need to look at the incoming data, the trend in the data that we have been observing and certainly 50 basis points can be on the table because we continue to be data dependent and the data we are getting points in that direction,” he told CNBC.

Even Dutch central bank governor Klaas Knot, in the past an outspoken hawk, said the ECB could “continue to cut rates until (they) reached neutral territory,” which economists put at around 2.0-2.5%.

Markets have fully priced in a 25 basis point cut on Dec 12 and some chance of a 50 bp move. The rate is seen falling to 2.0% by June.

This post appeared first on investing.com
0 comment
0
FacebookTwitterPinterestEmail

previous post
Amazon to shut down speedy brick-and-mortar delivery service
next post
UK budget is upcoming: here’s what analysts expect

You may also like

China central bank conducts 1.7 trln yuan of...

January 27, 2025

Fuji Media, rocked by sexual misconduct allegations, says...

January 27, 2025

ECB president fears loss of central bank independence

January 27, 2025

European tech shares tumble as China’s AI push...

January 27, 2025

Futures slip as investors eye China’s latest AI...

January 27, 2025

Markets may be repeating the mistake of 2019,...

January 27, 2025

How billionaire Caltagirone could influence Italy’s banking M&A...

January 27, 2025

How Italy’s MPS went from near collapse to...

January 27, 2025

Analysis-To weather Trump, emerging market investors look to...

January 27, 2025

Chinese AI startup DeepSeek overtakes ChatGPT on Apple...

January 27, 2025
Fill Out & Get More Relevant News








    Stay ahead of the market and unlock exclusive trading insights & timely news. We value your privacy - your information is secure, and you can unsubscribe anytime. Gain an edge with hand-picked trading opportunities, stay informed with market-moving updates, and learn from expert tips & strategies.

    Recent Posts

    • Divided Fed proposes rule to ease capital requirements for big Wall Street banks

      June 26, 2025
    • Women’s Tennis Association extends media rights deal with Tennis Channel through 2032

      June 26, 2025
    • Bumble shares jump 26% as dating company plans to axe 30% of workforce

      June 26, 2025
    • Small-business AI use is lagging, but one firm is channeling Sherlock Holmes and knocking out ‘grunt work’

      June 25, 2025

    Categories

    • Economy (245)
    • Editor's Pick (3,646)
    • Investing (534)
    • Stock (6,426)

    Latest News

    • Divided Fed proposes rule to ease capital requirements for big Wall Street banks
    • Women’s Tennis Association extends media rights deal with Tennis Channel through 2032

    Popular News

    • Morning Bid: Whipsawed dollar and fog of uncertainty? Get used to it
    • Australia stocks lower at close of trade; S&P/ASX 200 down 0.87%

    About The Significant deals

    • Privacy Policy
    • Terms & Conditions

    Copyright © 2025 thesignificantdeals.com | All Rights Reserved

    The Significant Deals
    • Investing
    • Stock
    • Editor’s Pick
    • Economy