The latest interest rate changes aim to help the European Central Bank (ECB) achieve its medium-term inflation target, President Christine Lagarde said. She believes that the latest monetary policy decision was "well calibrated".
Lagarde added that officials will closely monitor incoming economic data. These indicators will help determine whether there is a need to adjust borrowing costs. The head of ECB also said that the regulator is well prepared for possible uncertainty.
After an eighth rate cut in a year and an overall easing of monetary policy by 200 basis points, Lagarde said last Thursday that the campaign to reduce borrowing costs is coming to an end.
Many central bank officials, including Yannis Stournaras and Boris Vujcic, echoed her sentiment. According to their statements, the cycle of policy easing is either complete or close to completion.
ECB forecasts predict that inflation in the eurozone will slow to 1.6% in 2026 and then return to the 2% target in 2027, aligning with the institution's medium-term strategy. The regulator also expects the region's economic growth to accelerate during this period.