FXE - ECB President Lagarde Defies Powell's Dovish Stance: 'We Should Absolutely Not Lower Our Guard' | Benzinga
Investors hoping for European Central Bank (ECB) President Christine Lagarde to signal a path towards interest rate cuts in 2024, in line with Federal Reserve Chair Jerome Powell‘s previous day remarks, found themselves recalibrating these expectations following her hawkish press conference on Thursday.
At its final meeting of the year, the ECB opted to keep its key interest rates unchanged, marking the second straight hold and likely signaling that the end of the tightening cycle began in July 2022. However, the similarities with the Fed’s meeting ended there.
While Powell subtly opened the door to future rate reductions, Lagarde’s narrative was decidedly different.
Read also: Fed’s Unexpected Dovish Signals Spark Market Euphoria: Economists Weigh In
Lagarde Doesn’t Lower The Guard
“We should absolutely not lower our guard,” Lagarde asserted, countering the anticipations of market participants who were speculating on potential ECB rate cuts mirroring the Fed’s direction. ...