Commenting on the outcomes of the European Central Bank's latest policy meeting, its president Christine Lagarde said that the latest decision to cut rates by 25 basis points was a unanimous one, noting that a few weeks ago, a number of the policymakers would have argued to skip the move. She added that no one supported a 50 basis point reduction.
Lagarde highlighted that inflation has declined and that most indicators suggest it is on track to return to the ECB's 2% target. The ECB's chief noted that falling global energy prices and the appreciation of the euro could add further downward pressure on prices. However, she warned that increasing global trade disruptions are adding more uncertainty to the outlook for euro area inflation.
Lagarde also emphasised that the Eurozone's economic outlook is clouded by exceptional uncertainty. "The major escalation in global trade tensions and associated uncertainties will likely lower euro area growth by dampening exports, and it may drive down investment and consumption," she stated.
Lagarde also underlined that the ECB does not target any exchange rate and will determine its monetary stance based on what is appropriate. “We need to be data-dependent, and we need to rely on safe, reliable data,” she stressed, adding that the central bank stands ready to use whatever instruments are necessary.