European Central Bank (ECB) has lowered its interest rates for the first time since 2019. However, President Christine Lagarde reminds us that the fight against inflation is far from over.
"We see progress on many fronts... but it's still a long way to go", she writes in a debate article published in several European newspapers, including the Austrian Der Standard.
Lagarde emphasizes that a continued tight monetary policy is needed to stabilize price development.
"In other words, we need to keep our foot on the brake for a little while longer, even if we're not pressing as hard as before", she writes.
The 0.25 percentage point cut on Thursday meant that the so-called deposit rate landed at 3.75%. At the same time, the ECB raised its inflation forecast for 2025 to 2.2% from 2.0.
Lagarde writes in the debate article that the journey to the inflation target – 2.0% – will not be "completely smooth".
"It requires vigilance, engagement, and perseverance."
Inflation in the eurozone rose more than expected in May to 2.6%.
