In a move that solidifies the cautious stance of the European Central Bank (ECB), policymakers are expected to hold interest rates steady for the third consecutive meeting. This decision comes amidst growing internal dissatisfaction with ECB President Christine Lagarde and an uncertain economic landscape.

Despite speculation and investor expectations of around six rate cuts in 2024, the ECB seems poised to maintain the current rate levels. The possibility of a rate cut, once anticipated as early as April, now appears uncertain. Differing opinions within the ECB’s governing council have cast a shadow over the timing, with projections ranging from this summer to as late as 2025.

Adding to the complexities of the rate decision, an internal poll reveals stark criticism of President Lagarde. Conducted by the International and European Public Services Organisation, the survey shows that half of the respondents rate Lagarde’s performance as poor. This dissatisfaction comes at a critical halfway point in her eight-year tenure, contrasting with the more favorable assessments of her predecessors at similar junctures.

The ECB’s primary mandate of price stability is being tested as inflation rates remain a key concern. Although the consumer price spike in December was anticipated, the core rate has seen a decrease. ECB projections suggest a gradual easing of inflation, yet uncertainties, especially potential geopolitical disruptions, continue to influence policy decisions.

With the ECB likely to maintain its current stance, the focus shifts to President Lagarde’s response to the internal criticism. The upcoming press conference following the rate decision meeting on Thursday is expected to address these concerns, offering Lagarde a platform to respond to the survey results and clarify her position on the future direction of the ECB.

• Rate Decision: Thursday, 13:15 GMT / 14:15 CET
• Press Conference: Thursday, 13:45 GMT / 14:45 CET

As the ECB navigates through a complex mix of internal challenges and external economic pressures, the world awaits its next steps. The decision to hold rates steady, for now, reflects a cautious approach in an uncertain economic climate, while the internal dissatisfaction with Lagarde’s leadership adds another layer of complexity to the bank’s future policies.