ECB Lagarde after rate cut: Not committed in advance to a particular path

European Central Bank President Christine Lagarde said during a press conference on Thursday that the European Central Bank “is not committed in advance to a particular rate path.”

This came after the ECB decided to cut its main interest rate by 25 basis points to 3.25%, its third quarter-point cut this year. Markets had fully priced in the move after policymakers indicated low inflation risks and weak growth prospects.

During her press conference, Lagarde reiterated previous messages that the bank’s governing council is “determined to ensure that inflation returns to our 2% target at the appropriate time,” and that interest rates will remain on hold for as long as necessary to achieve that, according to CNBC.

According to CNBC, she said the approach remains “data-driven and meeting-by-meeting.”

Lagarde identified a range of weak spots in the eurozone economy, after the central bank indicated that sluggish economic activity would help keep inflation low in the coming months.

Manufacturing performance continued to contract, services activity eased after a stronger summer, businesses were slow to invest, housing investment continued to decline, exports were weak, and households continued to consume less, she said. “We expect the economy to strengthen over time as rising real incomes allow households to consume more. The gradually fading effects of tight monetary policy should support consumption and investment, and exports should contribute to the recovery,” Lagarde said.