Market Remains Cautious, Lagarde Signals Rate Adjustment!

<p>&nbsp;The President of the European Central Bank, Christine Lagarde, speaking at the Bundesbank's youth event, conveyed the need for caution before making any changes in current monetary policy. After a period of significant tightening, Lagarde stressed the importance of assessing the economic impact of the implementation of these measures.</p><p><br /></p><p>He also discussed market speculation about a potential rate cut by April, noting that it is important to consider various factors, including wage dynamics and geopolitical developments, before adjusting interest rates.</p><p><br /></p><p><br /></p><p>Lagarde reiterated the ECB's commitment to the consumer price growth target, with the hope that inflation will return to the bank's objective of 2% by the second half of 2025. The message came after its latest meeting yesterday, which showed a willingness to implement further rate hikes if needed. This attitude contrasts with some market expectations of easy monetary finance in the near future.</p><p><br /></p><p>Key voices from within the ECB's ranks, including Bundesbank President Joachim Nagel and Council member Gabriel Makhlouf, advised against rushing into monetary easing and at the same time did not rule out the possibility of future rate hikes. The latest forecast from the European Commission shows a moderate economic recovery, with hopes that Europe can avoid recession despite contraction in the third quarter and temporary inflationary pressures that may be caused by statistical effects.</p>