'We will set interest rates at sufficiently restrictive levels as long as it is needed to reach that 2% target,' she said.
President Christine Lagarde reiterated that the European Central Bank isn’t discussing cuts in interest rates — having raised them this week to what investors and economists believe is the peak. Lagarde told reporters Friday after a meeting of the Eurogroup that the level of borrowing costs and the length of time they stay elevated “will matter significantly,” without elaborating. “I repeat, we have not decided, discussed or even pronounced cuts,” she said in Santiago de Compostela, Spain.
The comments come less than a day after policymakers raised rates for a 10th straight time, to 4%. Reinforcing the idea that the move marked the end of the ECB’s unprecedented campaign of monetary tightening, Vice President Luis de Guindos and Estonian central bank head Madis Muller said current levels may be sufficient to return inflation to 2%.
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