Europe’s central bank head defends its recent rate hike to fight inflation
Lagarde said the ECB can make measured adjustments as economists see no more hikes and investors price just one more quarter-point move.
- On Monday, European Central Bank President Christine Lagarde signaled a policy shift during a conference in Sintra, Portugal, stating the bank no longer needs to act with the same force as during the past tightening cycle.
- Lagarde defended the recent quarter-point rate hike to 2.25% as a "robust decision," noting that without this action, inflation could have lingered above the bank's 2% target well into 2028.
- Annual inflation in the euro area stood at 3.2% in May, with projections indicating consumer prices will only return to the 2% target in the final three months of 2027.
- While analysts from Oxford Economics and Capital Economics suggest the ECB won't raise further, investors continue pricing in one more quarter-point move, potentially bringing the deposit rate to 2.5%.
- Europe is becoming more resilient to external shocks, Lagarde said, allowing the bank to make measured rate adjustments calibrated to specific economic conditions rather than reacting forcefully to every fluctuation.
43 Articles
43 Articles
Since the outbreak of the Middle East conflict, the forecast errors remained very low. At the same time, the ECB raised the key interest rate from 2.0 to 2.25%.
The European and American exchanges face this Tuesday, 30 June, a session marked by a dual monetary policy catalyst, on the last day of the second quarter of 2026. In Europe, the markets digest the signals of the President of the European Central Bank (ECB), Christine Lagarde, delivered at the opening of the ECB Forum in Sintra — which took place on Monday — while waiting for the estimate ‘flash' of the inflation of the Eurozone for June. In the…
The European Central Bank does not need to combat the current rise in prices with the same intensity with which it faced the inflationary crisis of 2022 and 2023, when it raised interest rates to its highest level since the creation of the euro. This message was launched last night by the president of the institution, Christine Lagarde, during the opening dinner of the annual forum of central banks that the agency holds in Sintra (Portugal). In …
From Sintra the president claims the successes after the Greek crisis: "Europe is more resilient." And defends the last decision: "If we had not raised the rates, high inflation until 2028"
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