The European Central Bank lowered its main interest rates this week for the first time since 2019, but ECB chief Christine Lagarde is dashing prospects of further cuts in the near future.
Inflation in the euro currency area was "currently on a good path" to reach the ECB's target of 2%, Lagarde wrote in an op-ed for Germany's Rheinische Post newspaper published on Saturday.
"However, it will take quite some time before inflation is completely banished from the economy," Lagarde added, warning of bumps in the road ahead.
"Vigilance, commitment and perseverance will be required along the way," writes the ECB president.
"For this reason, interest rates must remain restrictive for as long as is necessary to ensure price stability in the long term. In other words: We need to keep our foot on the brake for a while longer, even if not quite as firmly as before," Lagarde elaborated.
The ECB lowered its key interest rates by 0.25 percentage points on Thursday in what was the first rate cut following a series of hikes from July 2022.
The ECB cut its deposit facility, the rate the banks receive for deposits, by 0.25 percentage points to 3.75% after almost nine months at a record high.
It also announced a cut of its rate for fixed rate tenders, the ECB rate for lending to commercial banks in the 20-member eurozone, by 0.25 percentage points to 4.25%.
"The decisive factors for our future monetary policy decisions will be whether we can continue to see inflation return to our target in a timely manner, whether price pressure in the economy as a whole eases and whether our monetary policy continues to work effectively against inflation," Lagarde said.
"These factors will determine when it is time to release the brakes further."
Annual inflation in the eurozone is expected to be 2.6% in May, up from 2.4% in April, according to a recent estimate from Eurostat, the EU's statistic agency.