European Central Bank: Interest Rates Already at Their Peak

Christine Lagarde, president of the European Central Bank (ECB), said that “interest rates appear to have reached their highest point.” Lagarde said this on Friday, January 12, during an interview with French television “France 2.” The EU’s chief financial officer suggested that “interest rates could start to decrease if inflation falls below 2%.” But Lagarde did not want to give an exact date, emphasizing, however, that the most difficult and worst moment of inflation seems to be behind us. Therefore, if forecasts for inflation stability come true, the ECB may take action to lower interest rates.

The ECB estimates inflation should hover between 2.5% and 3% for most of 2024. Although the possibility of interest rate cuts was mentioned by Lagarde between March and April, many financial experts said it would be “premature to talk about a downward revision of base rates until the first quarter wage data expected in May is known.”