ECB Review - March 2024: June In Focus
Resend: ECB Review - March 2024: June In Focus
* Please note that there was a typo in the initial version concerning the NORD/LB view, which has now been amended.
The ECB left all policy settings unchanged at the March meeting, as expected. There were three key takeaways from the meeting. First, revised staff macroeconomic projections now show inflation returning to target in 2025, with the forecast for that year now standing at 2.0%, down from 2.1% previously. Although a marginal adjustment, it nonetheless conveys the ECB’s growing confidence in the trajectory of inflation. Second, and relatedly, President Lagarde herself stated that the ECB is becoming more confident, although it is not ‘sufficiently confident’ yet to consider cutting policy rates. What constitutes ‘sufficiently confident’ is not clear, but President Lagarde increasingly highlighted the importance of wages and profit margins, albeit not the parameters that would trigger the easing cycle. Third, there was a clear steer on a likely cut at the June meeting. Despite repeating the mantra of ‘data dependent, not date dependent’, President Lagarde nonetheless indicated that there would be additional evidence available in April and even more data by June – a date that was repeatedly highlighted during the press conference.
