European Central Bank (ECB) President Christine Lagarde, speaking at the Financial Times Global Boardroom event, stated that the Eurozone has shown a stronger stance than expected against US tariff policies. Lagarde emphasized that the European Union has not retaliated against these measures, the euro has not depreciated, and the labor market remains robust.
Lagarde said, "We had made some upward revisions in our recent economic forecasts, and I think we could make a similar update in December."
The resilience shown by the economy has led policymakers to believe that borrowing costs may remain stable in the near future. Gross domestic product in the Eurozone grew by 0.3 percent in the third quarter, exceeding previous estimates.
While Bank of Lithuania Governor Gediminas Simkus stated that he does not see a need for further interest rate cuts, Executive Board member Isabel Schnabel expressed satisfaction with investors' expectations that the next move could be a rate hike. These statements have led investors to not expect interest rate cuts from the Frankfurt-based bank next year.
Lagarde stated that the economy is 'quite close to its potential' and added, "With our history of inflation around 2 percent and our medium-term projection of 2 percent, I can say again that we are in a good position." She also responded to French President Emmanuel Macron's call for a new monetary policy approach in the Eurozone that focuses not only on inflation but also on economic growth and employment. Lagarde stated that the current framework already allows for addressing issues such as growth, employment, innovation, productivity, and climate change.
News Source: 12punto
