- Prior decision
- Main refinancing rate 4.50% vs 4.50% expected
- Prior 4.50%
- Deposit facility rate 4.00% vs 4.00% expected
- Prior 4.00%
- Marginal lending facility 4.75%
- Prior 4.75%
- Since last policy meeting in January, inflation has declined further
- Core inflation projections revised lower to 2.6% for 2024, 2.1% for 2025 and 2.0% for 2026
- Economic growth projection revised lower for 2024 to 0.6%
- Economy to then grow at 1.5% in 2025 and 1.6% in 2026
- Determined to ensure that inflation returns to 2% medium-term target in a timely manner
- Interest rates are at levels that, maintained for a sufficiently long duration, will make a substantial contribution to this goal
- Future decisions will ensure rates will be set at sufficiently restrictive levels for as long as necessary
- To continue data-dependent approach to determining the appropriate level and duration of restriction
- Full statement
Apart from lower revisions to inflation and economic growth projections, the language in the statement is very much the same. The shift lower in the projections just reflects the idea that the ECB is setting up for rate cuts in the months ahead. Besides that, there isn’t anything in the forward guidance that is new or suggests and explicit bias to cutting rates – at least for now.
EUR/USD is down slightly though after the softer economic projections, from around 1.0895 earlier to 1.0880 currently. It’s over to Lagarde next.