FRANKFURT - The European Central Bank was expected to stand pat yesterday and call for patience in the ongoing battle against inflation, pushing back against market hopes of rapid interest rate cuts. The Frankfurt-based institution launched an unprecedented rate hiking cycle in mid-2022 after Russia’s war in Ukraine pushed food and energy costs higher, sending inflation soaring.

With inflation steadily slowing after peaking at more than 10% last year, the ECB is tipped to leave rates unchanged for a third consecutive meeting, keeping the benchmark deposit rate at a record 4%. The bank’s governing council is expected to repeat that it considers rates are currently at levels that “will make a substantial contribution” to returning inflation to the 2% target.

ECB watchers will be more interested in president Christine Lagarde’s 1345 GMT press conference, hoping for clues on when the bank might start slashing borrowing costs, given the progress on taming inflation. She has already pushed back against market bets of rate cuts starting as early as April, insisting last week that it was too soon to “shout victory”.

Lagarde told Bloomberg television that the first rate cut would “likely” only come this summer and only if the latest data supported such a move, citing economic uncertainties and concern about rising wages. The US Federal Reserve is facing a similar debate across the Atlantic, where Fed officials have been tempering market expectations of rate cuts as early as March. While it was appropriate to “ask when policy adjustments would be necessary so we don’t put a stranglehold on the economy, it’s really premature to think that that’s around the corner,” San Francisco Fed president Mary Daly told Fox Business. - Nampa/AFP