Lagarde: ECB is on the path to cut interest rates in the near term

European Central Bank President Christian Lagarde said on Tuesday that the central bank is on the path to lowering interest rates in the near term, unless major shocks occur.

According to CNBC, Lagarde said on the sidelines of the spring meetings of the International Monetary Fund, “We are monitoring the process of declining inflation, which is proceeding in accordance with our expectations.” She added that the Central Bank only needs more confidence in the process of declining inflation, but if it proceeds according to expectations, and no shocking developments occur, then we are heading in that direction. Until the moment when we should ease tight monetary policy.

Lagarde’s comments came after the European Central Bank gave clear signals about the possibility of starting to cut interest rates during its June meeting.

The European Central Bank fixed interest rates for the fifth time in a row during its meeting last Thursday, but indicated that the slowdown in inflation means that it may begin reducing interest rates soon.

When Lagarde was asked about the central bank’s confidence in the continued decline in inflation in the wake of the rise in commodity prices, especially the possibility of a jump in oil prices amid geopolitical tensions, she said that all commodity prices have an impact and that they will closely monitor the movements of those prices.