ECB President Christine Lagarde stresses need for further rate cuts

Speaking at the press conference following the European Central Bank’s (ECB) decision to cut rates by 25 basis points, ECB President Christine Lagarde showed an increased sense of urgency, pointing to several key factors, including escalating trade tensions and growing disinflationary pressures.

Initially, the ECB took a cautious approach to monetary policy. But now, the situation calls for stronger action to prevent inflation in the eurozone from falling too low.

Just a few weeks ago, some ECB officials were still pushing for maintaining rates unchanged. But the euro strengthening and sliding energy prices convinced them that monetary easing was necessary. According to Lagarde, economic risks in the region have intensified while inflation forecasts have grown more uncertain.

During the meeting, the ECB also discussed a more aggressive 50 basis points rate cut, but ultimately opted for a unanimous decision to lower borrowing costs by just 25 basis points. ING analysts suggest this cautious approach reflects policymakers' desire to maintain flexibility in case the economic outlook improves later.