European Central Bank President Christine Lagarde has tempered expectations for further rapid rate cuts following the recent key interest rate reduction. "Inflation in the euro area is currently on track to reach the two percent mark by the end of next year," Lagarde wrote in a guest article for the Saturday edition of the "Rheinische Post.

The President of the European Central Bank, however, emphasized that it would still take some time before inflation is completely eliminated from the economy. "Until then, not everything will go smoothly. Vigilance, commitment, and perseverance will be required on this path," Lagarde continued.

Therefore, interest rates must "remain restrictive for as long as necessary to ensure long-term price stability." Lagarde added: "We need to keep our foot on the brake for a while longer, although not as firmly as before.

For future monetary policy decisions, it will be crucial "whether we can continue to observe that inflation returns to our target value in a timely manner, overall price pressures in the economy decrease, and our monetary policy continues to effectively counteract inflation." These factors would dictate when it is time "to ease the brake further." Although significant progress has been made, the fight against inflation is not yet over, emphasized Lagarde.

For the first time in almost five years, the ECB eased interest rates again on Thursday and lowered the key interest rates by 0.25 percentage points. The main refinancing rate, at which commercial banks can borrow money from the ECB, is now at 4.25 percent.

Inflation has indeed slowed down significantly. In October 2022, the inflation rate in the Eurozone had climbed to a record 10.7 percent. In May 2024, consumer prices rose by only 2.6 percent. Thus, the ECB has almost achieved its most important goal: price stability, which it sees as guaranteed at 2.0 percent.