"The ECB is now at a point where it can pause tightening and switch to wait-and-see mode"

According to European Central Bank (ECB) President Christine Lagarde, the ECB is now at a point where it can pause tightening and switch to wait-and-see mode.

Speaking at an event organized by the Bundesbank in Frankfurt, Lagarde said, "We have already done a lot. Given the amount of ammunition we have used, we can decide how long we need to remain at the current interest rate level and what decision we need to make by very carefully observing the components of our lives, such as wages, corporate profits, fiscal and geopolitical developments, and certainly how our ammunition affects our economic life."

Lagarde promised to bring the rise in consumer prices back to the target level, stating, "The fight against inflation is not over, and we are certainly not declaring victory."

SIDES ARE BECOMING CLEAR AT THE ECB

Before Lagarde's speech, members of the European Central Bank speaking in various media outlets expressed different views on the path forward.

Francois Villeroy, a member of the bank's Governing Council, said that the ECB would not raise interest rates unless an unexpected situation arises. Speaking to France 5 television, Villeroy stated, "Excluding surprises, I do not think the ECB will raise interest rates." Noting that a gradual reduction in interest rates will happen one day, Villeroy added, "But we are not at that point yet." Welcoming the strong disinflation trend in recent months, Villeroy believes it is possible for the ECB to achieve a soft landing. Bundesbank President Joachim Nagel, in a statement on Thursday, had indicated that he could not rule out another interest rate hike, saying, "I think we are close to the terminal interest rate level."

News Source: 12punto