“Need to be really careful”

According to its President Christine Lagarde, the European Central Bank must continue to move cautiously on the path of interest rates. French said on Wednesday in Washington that it is important to orient ourselves to the incoming data. These numbers will show how the economy is performing and how high inflation is. “There will be judgment in our decisions, but we really have to be careful in doing so,” she added.

Maybe bigger steps?

She made her comments against the backdrop of rising interest rates in financial markets. Last week, the European Central Bank cut its key interest rate for the third time this year. Investors now expect more easing at each of the next four to five central bank meetings. Portuguese councilor Mario Centeno has already thought out loud about possible bigger steps downward.

The European Central Bank expects economic recovery

Despite recent negative signals, the European Central Bank continues to expect an economic recovery in the Eurozone. According to ECB Chief Economist Philip Lane, some of the latest data raises questions: “But we still believe that this narrative of a good economic recovery is still very close to the baseline.” However, according to the European Central Bank, current data point to a slowdown in growth. European Central Bank President Lagarde explained that households consumed less than expected after the recent interest rate decision.

Signs of a slowdown in the economy

The bottom line is that this indicates that economic activity has been somewhat weaker than expected. However, the economy is likely to improve gradually. Exports could benefit from increased global demand.

But recently, there have been increasing signs of economic deterioration in the eurozone: the Purchasing Managers' Index (PMI) from S&P Global, an important leading indicator, pointed to a decline. As for PMI data scheduled for release on Thursday, experts polled by Reuters expect the euro zone will not jump above the growth threshold.