European Central Bank Eyes Cuts

Presenter Francine Lacqua, Singaporean politician and economist Tharman Shanmugaratnam, Mohammed Al-Jadaan, Board Member of Saudi Aramcoon, President of European Central Bank Christine Lagarde, Co-founder and co-chairman of the private equity firm The Carlyle Group David Rubenstein, German finance minister Christian Lindner, and Nigerian-American economist Ngozi Okonjo-Iweala, rom left, take part in the panel "The Global Economic Outlook" the last day of the forum's Annual Meeting in Davos, Switzerland, Friday, Jan. 19, 2024. (AP Photo/Markus Schreiber)

The European Central Bank on Thursday held interest rates steady for a fifth straight meeting, as anticipation builds for rate cuts in June.

“If the Governing Council’s updated assessment of the inflation outlook, the dynamics of underlying inflation and the strength of monetary policy transmission were to further increase its confidence that inflation is converging to the target in a sustained manner, it would be appropriate to reduce the current level of monetary policy restriction,” it said in a statement.

The ECB made no direct reference to loosening monetary policy in its previous communiques.

The central bank for the 20 countries that share the euro currency hiked its key rate to a record 4% in September. It has left this rate unchanged at every gathering since.

Policymakers and economists have zeroed in on June as the month when rates could start to be reduced, after the ECB trimmed its medium-term inflation forecast. Price rises in the euro zone have since cooled more than expected in March.

The ECB on Thursday said incoming information had “broadly confirmed” its medium-term outlook, with falling inflation led by lower food and goods.

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