At her post-meeting press conference, the European Central Bank's president Christine Lagarde acknowledged that the eurozone's economy is likely to have stagnated in the fourth quarter of 2023 and added that risks to growth remain tilted to the downside. She noted, however, that some surveys point to a pickup in 2024.
The official also admitted that demand for labour in the region is slowing and pointed to upside risks to inflation, including the heightened geopolitical tensions, especially in the Middle East, which could push energy prices and freight costs higher in the near term. The ECB's boss emphasized the rate-setters look attentively at these developments.
Lagarde reiterated that the ECB's policymakers are determined to ensure inflation returns to the 2% target in a timely manner, and they will continue to follow a data-dependent approach.
She also unveiled that the consensus around the table of the Governing Council today was that it is premature to discuss rate cuts. In addition, Lagarde stressed that she certainly stands by her last week's comments that rate cuts in the summer are likely.