European Central Bank President Christine Lagarde stressed on Thursday during a press conference that while the fight is not over yet, inflation is "on track" to hit the 2% target.

"That gave us a level of confidence to decide to cut and to decide the appropriate cut, which in our view is 25 basis points. That proposal was agreed [on] by all members of the Governing Council. There were some discussions with some proposals to consider possibly 50 basis points, but the overall agreement to which everyone rallied" was the quarter of a percentage point cut, Lagarde detailed.

In the latest economic projections, the ECB staff shared that they see headline inflation averaging 2.4% in 2024, 2.1% in 2025, 1.9% in 2026 and 2.1% in 2027.