The latest signals from Christine Lagarde are that the European Central Bank might start the rate-cutting cycle earlier than the US Federal Reserve. The ECB president said last month that if there was not “a major shock in development”, the central bank was heading towards a moment where it had to moderate its restrictive monetary policy.

Lagarde stressed the ECB was not “Fed dependent” when deciding to make its move. Markets are eagerly standing by, with investors largely pricing in a cut in its benchmark deposit rate from an all-time high of 4 per cent as early as next month, with two possible further cuts this year.

In contrast, markets have priced in a higher-for-longer policy at the Fed, with the likelihood of one cut in September or November plus one other possible cut in the year. “It is likely to take longer for us to gain confidence that we are on a sustainable path down to 2 per cent inflation,” Fed chair Jay Powell said last week.