The European Central Bank could start cutting interest rates this summer, president Christine Lagarde said Wednesday, while stressing that any such move would depend on the latest economic data.
The ECB began hiking borrowing costs at an historically fast pace in July 2022 to tame red-hot inflation after Russia's war in Ukraine sent energy costs soaring.
Easing inflation and a darkening economic picture since then led the ECB to freeze borrowing costs at its last two meetings, prompting speculation about when the Frankfurt institute might start cutting rates.
In an interview with Bloomberg television in Davos, Lagarde was asked to comment on hints by ECB governing council members that cuts could come in the summer.
"I would say it's likely too," Lagarde said.
"But I have to be reserved because we are also saying that we are data-dependent and that there is still a level of uncertainty and some indicators that are not anchored at the level where we would like to see them."
Markets have been pricing in rate cuts from as early as April, but ECB governors have been at pains to tamp down those expectations in recent weeks.WW