The ECB is “not dependent on the Fed”, says Christine Lagarde

The President of the European Central Bank Christine Lagarde said on Tuesday in Washington that the ECB was “dependent on data but not on the Fed” (American central bank), particularly in terms of the timetable for rate cuts.

Asked on the CNBC channel on the sidelines of her visit to the spring meetings of the IMF, Ms. Lagarde dismissed the question of a divergence which could emerge between the monetary policies of the ECB and the Fed.

The central bank of the euro zone could, in fact, lower its interest rates before the American Federal Reserve due to more stubborn inflation in the United States.

“We are data dependent. We had some in March and a little in April. It is on this basis that we must make our decisions and not on the basis of a central bank in the world, even if it is the Fed”, affirmed the boss of the ECB while it is a question of a first rate cut in the euro zone in June.

Without committing to this date, Ms. Lagarde reiterated that she observed “a process of disinflation” in the euro zone.

“We need to have confidence in this process, but if it continues in the expected direction, if we do not face a major shock, we are heading towards the moment when we must moderate the restrictive monetary policy”, a- she declared.

Inflation in the euro zone fell to 2.4% over one year while in the United States, according to the CPI index, it began to accelerate again to 3.5%, seeming to postpone a start until later. decline in American interest rates.

The President of the ECB, however, warned that the road to inflation remaining sustainably at 2% will be “bumpy”.

Asked about the reasons which explain the current inflation differential between the United States and Europe, Ms. Lagarde highlighted “consumer behavior”.

“The big difference is the consumer attitude: European consumers are very cautious and continue to save considerably,” underlined the manager.

” Why that ? This is due to fiscal policy, energy, but also the fact that American consumers tend to have confidence, to spend and to save less,” she said.

The governor of the Bank of France, François Villeroy de Galhau, assured him that he was following “closely geopolitical developments in the Middle East and their possible repercussions on energy prices”, also on Tuesday, during a round table organized by the Economic Club of New York.

“If these consequences ever prove to be lasting and spread – i.e. affect underlying inflation – we would have enough room after the first rate cut to adjust the pace and destination if necessary, of the monetary trajectory,” he assured.

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