(March 20): The European Central Bank can’t commit to further reductions in borrowing costs after a likely first move in June, according to president Christine Lagarde.

In a speech Wednesday, Lagarde reiterated that “when it comes to the data that is relevant for our policy decisions, we will know a bit more by April and a lot more by June.” Beyond that, the monetary-policy path is unclear.

“Our decisions will have to remain data dependent and meeting-by-meeting, responding to new information as it comes in,” she told a conference in Frankfurt. “This implies that, even after the first rate cut, we cannot pre-commit to a particular rate path.”

With the timing of the first reduction increasingly clear, the debate is shifting to how quickly the ECB will unwind its historic campaign of rate hikes and where borrowing costs will ultimately end up.

Some officials, like Greece’s Yannis Stournaras, have raised the possibility of a series of moves this year — in line with investor expectations. Others have remained more vague. Vice president Luis de Guindos said Tuesday that the ECB will have to adjust policy “based on the data we see.”

“We will be calibrating for a long time to come the balance between the level of restrictiveness we need and the rate of progress we see in underlying inflation and wages,” chief economist Philip Lane told the same event Wednesday in Frankfurt.

Speaking separately, Ireland’s Gabriel Makhlouf was similarly cautious.

“The good news is that inflation is now in the process of coming down,” he told LM FM radio. “I’m hopeful that the very rapid increase in interest rates will now have reached what I’ve described as the top of the ladder — it’s now the question of how long we stay at the top of that ladder.”

With the 20-nation euro zone teetering on the brink of a recession for more than a year, some are warning against an overly restrictive policy stance.

“A stronger-than-expected monetary-policy impact remains a downside risk to the euro-area growth outlook,” Spain’s Pablo Hernandez de Cos said in Frankfurt. “We shall be closely monitoring the materialization of such risks and calibrate accordingly the degree of monetary restriction.”

“Headline inflation will be below the ECB’s 2% target for most of 2H24. We expect the inflation outlook to allow the Governing Council to cut by 125 basis points this year, risks are skewed toward reducing by a little less.” Bloomberg’s senior euro-area economist David Powell said.

Lagarde said figures due over the coming months on wages, productivity and corporate profit margins will determine when rates can be lowered.

“If these data reveal a sufficient degree of alignment between the path of underlying inflation and our projections, and assuming transmission remains strong, we will be able to move into the dialing back phase of our policy cycle and make policy less restrictive,” she said.