ECB's Lagarde: Decision to cut was unanimous

president laga thank you very much um I have a question of course on the decision to cut by 25 basis points versus 50 so why did you go for 25 and my second question is uh looking into the future given that the FED also is going to start to cut um the macroeconomic picture is gloomier than before inflation is coming back so what is the market right to anticipate um that you cut another 50 by the end of the year thank you thank you so much and good afternoon and it's nice to see you all after the break first of all um so on on your question about our decision we decided to cut the deposit facility rate by 25 basis points and that was a unanimous decision we proceeded as we normally do and have very clearly indicated by obviously looking at data and looking in particular at data through the prism of our three key criterias so when you look at the incoming information it confirms our previous projections and it Comforts us in our confidence that we are heading towards our Target in a timely manner so during the course of 25 in particular inflation will decline towards uh to 2% Target and we thought that given that gradual disinflationary process it was perfectly appropriate to moderate the degree of monetary policy restriction by cutting our deposit facility rate which I will call the dfr if you don't mind from now on it's the deposit facility rate uh by 25 basis points when I said that we looked at all the information that we get on the occasion of a projection exercise through our three prisms I'm referring obviously to the inflation Outlook I'm referring to the underlying inflation and I'm referring to the transmission of uh monetary policy and you know the on the inflation Outlook when we receive the projections of our staff for September it's virtually and changed relative to June for the inflation Outlook and it continues to see a return to 2% before the end of 25 and this is by the way the five consecutive projection exercise uh pointing to that 2% at the end of 25 so why do I say that because it certainly reinforces our confidence in the solidity and robustness of those projections that's for the first prism the inflation Outlook the underlying inflation on the other hand we look at the various indicators that we have uh from domestic to pcci and here we see one particular indicator the domestic indicator which is abating a little bit because it moved from 4.5 to 4.4 between uh June and July and it is not satisfactory it is resistant it is persistent this is the reason why we have to be resilient uh in our approach and very uh attentive to the various um components of um core inflation as measured by those various indicators the third prism is the policy transmission and on that front we all observe that the financing conditions are continue to be restrictive and the footprint of our monetary policy in the real economy has been visible so on the basis of that uh review of incoming data staff analysis consistency of the projections for the fifth exercise in a row that decision to cut by 25 basis points was perfectly legitimate and as I said unanimously decided