Christine Lagarde, President of the European Central Bank (ECB), said that the incoming data on wages and inflation were encouraging, but warned it was too early to discuss further actions by the ECB after the first rate cut.
"When changing the parameters of monetary policy, we will continue to focus on data. In addition, decisions will be made meeting-by-meeting, responding to new information as it comes in. Thus, even after the first rate cut, we cannot pre-commit to a particular rate path," Lagarde said.
According to official data, consumer price growth slowed in February, confirming experts' forecasts and preliminary estimates. Meanwhile, core inflation fell to its lowest level since March 2022. According to the report, the consumer price index rose by 2.6% per year after an increase by 2.8% per year in January. Meanwhile, on a monthly basis, the consumer price index rose by 0.6%, confirming economists' forecasts and offsetting the January drop (-0.4%). This was the sharpest price increase since April 2023. Eurostat reported that the core consumer price index - excluding energy, food, alcohol and tobacco - rose by 3.1% per year, as expected, after an increase by 3.3% per year in January. Core inflation has been declining for the 7th month in a row.
"To begin easing monetary policy, we need to see a slowdown in wage growth, a continued decline in inflation and new internal forecasts confirming that price growth is returning to the target level (2%)," Lagarde said, adding that the ECB may cut rates at the June meeting if inflation continues to decline.