European Central Bank (ECB) head Christine Lagarde said on Wednesday that policymakers will think about lowering interest rates in June, but the path forward is still uncertain.

Lagarde, speaking in Frankfurt, mentioned that in June, they will have new projections to see if the inflation trend they predicted in March remains accurate. The June meeting is seen as significant by many members of the ECB’s Governing Council because they will have data from spring wage talks, which could affect inflation.

The data available in June will also give more insight into underlying inflation and the job market, according to Lagarde. If the data aligns with their projections and economic transmission remains strong, they may start to make policy less restrictive.

However, Lagarde cautioned that there will still be domestic price pressures. She expects service inflation to stay high for much of the year, so they need to monitor incoming data continuously to support their inflation outlook.

Despite geopolitical uncertainty and ongoing price pressures, Lagarde’s overall message was positive about inflation. Eurozone inflation dropped to 2.6% in February, but service prices remained higher at 3.9%.

Lagarde expressed confidence in the latest economic projections, which forecast inflation at 2.3% in 2024, 2% in 2025, and 1.9% in 2026.

The ECB has kept rates unchanged since reaching a record high in September. Until March, they had not discussed cutting rates. Their next meetings are in April and June.

Market focus is now on how many rate cuts the ECB might make this year. Money markets suggest three cuts by December, with a possible fourth, according to Reuters data.