Disinflation Data Could Lead to Further Interest Rate Cuts

European Central Bank President Christine Lagarde recently indicated that interest rates may decrease further if the ongoing disinflation trend is confirmed by incoming data. Speaking at the Bank of Lithuania's Annual Economics Conference, Lagarde emphasized the current restrictive policy stance, stating, "But if the incoming data continue to confirm our baseline, the direction of travel is clear, and we expect to lower interest rates further."

In her speech, Lagarde also cautioned about potential increases in energy prices and freight costs due to rising geopolitical pressures. Despite these warnings, she expressed optimism about the economic outlook, concluding that the European bloc is "at a stage where the darkest days of winter look behind us," allowing for a more forward-looking perspective.