Posted 1/25/2024, 5:11:54 AM
ECB's Lagarde Faces Pressure on Rates But Vows Steady Course Amid Hopes and Hazards for Economy
- European Central Bank President Lagarde will likely resist pressure for quick interest rate cuts despite hopes for economic stimulus.
- Lagarde has indicated rates may be cut this summer but must stay high to curb inflation. Markets anticipate earlier rate cuts.
- Stock prices have risen on hopes for rate cuts boosting business activity. But cuts also raise questions about whether stock gains can continue.
- Inflation has dropped closer to the ECB's target, fueling expectations for rate cuts after rapid 2022 hikes. But officials want more data showing inflation is beaten down.
- Attacks on ships in the Red Sea have forced rerouting around Africa, disrupting consumer goods and energy supplies to Europe. This could raise companies' expenses and fuel more inflation.