Lagarde Q&A: We need to see more data on wages

<ul><li>When we look at wage data right now, it's not declining</li><li>We will have a lot more data in 2024 and we need that to determine if declining inflation is sustainable</li><li>We have to keep our guard up</li><li>Decision on PEPP was shared by a "very, very large majority". Some would have liked a different taper, earlier or later</li><li>We did not discuss rate cuts at all</li><li>We are at the medium-term target that we set for ourselves of reaching the 2% at the end of our projection. We are probably a bit severe with ourselves… we are going to look very carefully at the end of 2025, where we're at 2.1% right now… the projections we have now are conditions on data from Nov 23</li><li>We will be looking at our three criteria in the months ahead</li><li>there are signs of reduced profit margins suggesting that companies are finally absorbing the input and wage increases which would be good news going into 2024</li></ul><p>Lagarde said that there's space between rate hikes and rate cuts. "You don't go from solid to gas without going through the liquid state." … as any science teacher will tell you, that's not true. It's called sublimation.</p><p>So far she has declined to repeat that they won't cut in the first two quarters of 2024 and is instead deferring to data, including wage agreements.</p>

This article was written by Adam Button at www.forexlive.com.