MNI ECB Review - April 2024: Going 'Live' In June

The ECB left policy unchanged at the April meeting, but provided the clearest indication yet of an upcoming policy rate cut.

• A new sentence was added to the press statement: “If the Governing Council’s updated assessment of the inflation outlook, the dynamics of underlying inflation and the strength of monetary policy transmission were to further increase its confidence that inflation is converging to the target in a sustained manner, it would be appropriate to reduce the current level of monetary policy restriction.”
• Despite President Lagarde consistently stressing that the ECB takes a ‘meeting-by-meeting’ and ‘data dependent’ approach, the revised statement provides a clear steer on policy rates at the next meeting, albeit conditionally on the data.
• Given that communication from various GC members in the runup to the April meeting indicated a preference for a June cut, which similarly follows President Lagarde’s previous signal that “we will know a lot more in June”, the new sentence in the April press statement is merely reaffirming what we already know.

For the full publication, please see:

ECB Review April 2024.pdf