Many ECB policy-makers have expressed support for a first reduction in borrowing costs from their current record highs, most likely in June, with the debate now focused on how many more cuts would follow
The European Central Bank cannot commit to a pre-set number of interest rate cuts even after it starts reducing borrowing costs as the pace of cuts will depend on incoming data, ECB President Christine Lagarde said on Wednesday.
“Our decisions will have to remain data dependent and meeting-by-meeting, responding to new information as it comes in,” Lagarde said. “This implies that, even after the first rate cut, we cannot pre-commit to a particular rate path,” she told a conference in Frankfurt. And Lagarde hinted that this fall was likely to be “more durable and less beholden to assumptions about commodity prices” than in the past due to an expected fall in underlying inflation, which strip out volatile food and energy prices.
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