ECB President Lagarde under fire: Employee survey causes unrest and raises questions about monetary policy.

ECB President Lagarde under fire: Employee survey causes unrest and raises questions about monetary policy.

According to a report from www.nzz.ch, the European Central Bank (ECB) left interest rates in the euro area unchanged on Thursday. However, the decision was overshadowed by an employee survey, the results of which pointed to increasingly negative sentiment towards President Christine Lagarde. A slim majority of employees rated their work as “bad” or “very bad” and more than 53 percent said Lagarde was not the right person for the job. This result is in stark contrast to their predecessors Mario Draghi and Jean-Claude Trichet, who were rated more positively.

In addition to the internal disagreements, the ECB is struggling with temporarily excessive inflation in some euro area countries. Although inflation has now fallen, it is still above the central bank's medium-term target of two percent. Nevertheless, the ECB stuck to its interest rate pause and left key interest rates unchanged. Current data suggests that the declining trend in core inflation is continuing, with previous rate moves continuing to be attributed to financial conditions. This dampens demand and also contributes to the decline in inflation.

Against this background, the financial markets are expecting a first interest rate cut by the ECB in April, particularly due to the weakening economy. However, there are also concerns that inflation could pick up again, particularly because of possible high wage deals and geopolitical tensions in the Middle East. The developments surrounding inflation and the internal mood in the ECB could therefore have a significant impact on the financial market and the entire financial sector.