The head of the European Central Bank, Christine Lagarde, announced the possibility of taking a pause in further tightening of monetary policy in order to assess the impact of the measures already taken. Speaking in Frankfurt, Lagarde stressed that the ECB has already actively used various instruments and now it is necessary to analyze their effects on the economy. Last month, the European regulator left key interest rates at the same level, indicating the need to maintain these rates to reduce inflation in the eurozone to the target level of 2%. Inflation in the eurozone in October reached its lowest in two years (2.9%), and in November it is expected to decline further. Lagarde noted that, despite a slight contraction of the eurozone economy in the third quarter, a recession is likely to be avoided thanks to the recovery in consumer spending. However, she stressed that «the battle is not over yet.» At the same time, the ECB leadership, according to the minutes of the last meeting, expressed readiness for new rate hikes if necessary. The head of the Bundesbank, Joachim Nagel, also expressed the opinion that it is important not to rush with policy easing until price stability is achieved. Nevertheless, the market expects that the first ECB rate cut may occur as early as April next year.
