Cautious forecasts: Why ECB President Christine Lagarde is betting on falling interest rates

Cautious forecasts: Why ECB President Christine Lagarde is betting on falling interest rates

According to a report by finanzmarktwelt.de,
It has become increasingly unlikely that the European Central Bank (ECB) will raise interest rates after inflation in the euro zone has recently cooled sharply. This could affect exchange rates and interest rates in the market.

According to an interview with Isabel Schnabel, who is part of the ECB's hawkish camp, there is unlikely to be another interest rate hike given the declining consumer price data. Consumer price inflation in the euro zone fell to 2.4% in November, falling more sharply than economists had expected. It is therefore assumed that the ECB will cut interest rates in April, which is already priced into the money market.

Inflation risks are on the upside, meaning conditions could change. This will likely impact market participants' expectations of future interest rate decisions. The public statements by members of the ECB Executive Board, such as Joachim Nagel and Isabel Schnabel, influence market participants' expectations of the ECB's monetary policy.

The Eurozone is expected to remain in market focus as the ECB is set to announce its monetary policy decision next week. This decision will also affect the government bond market and the foreign exchange market. Developments in the Eurozone could therefore influence financial markets worldwide.

Given the uncertainties and changing conditions, it is important to closely monitor current data and statements from ECB members in order to correctly assess the possible impact on the market. Investors should prepare for possible volatility in financial markets as expectations of the ECB's monetary policy could change in the near term.