Exclusive-ECB’s Vujcic Cools Oil-Fuelled Bets on Rate Hikes
Christine Lagarde said the central bank will weigh growth and inflation data as investors price in three to four more hikes.
- On Friday, European Central Bank President Christine Lagarde pushed back on market bets for aggressive rate hikes, stating that interest rates do not move in "lockstep" with energy prices.
- Investors have aggressively increased expectations for borrowing cost hikes as a widening Middle East conflict raised fuel costs, pushing inflation forecasts near 4% by year-end.
- ECB Vice President Boris Vujcic cautioned against focusing solely on energy prices, noting that policymakers assess a broader set of economic data when determining appropriate interest rate levels.
- Vujcic proposed raising bank reserve requirements to drain excess liquidity from prior stimulus, while Lagarde emphasized the bank is taking a "measured" response to inflation challenges.
- Although money markets price three to four additional rate hikes through next year, policymakers signaled they will monitor developments in coming months and adjust policy accordingly.
13 Articles
13 Articles
Rising energy prices drive inflation up further, but the ECB's head warns against focusing exclusively on energy prices when making interest rate decisions.
Lagarde Says ECB Rates Not Tied Directly to Energy Price Moves
Lagarde pushes back on market rate-hike bets after energy costs soar ...
ECB’s Lagarde Says Rates Will Not Move in Lockstep With Energy Prices - ActionForex
European Central Bank President Christine Lagarde, speaking at a news conference in Dublin on Friday, pushed back against expectations that soaring oil and gas prices would automatically produce an aggressive series of rate increases. Interest rates “do not move in lockstep with the price of energy,” she said, because the shock affects not only inflation […]
According to her boss Christine Lagarde, the European Central Bank does not focus its interest rate policy solely on the rise in energy prices. Other factors such as economic growth and consumption also played a role, Lagarde stressed on Friday in Dublin:
According to her boss Christine Lagarde, the European Central Bank does not focus its interest rate policy solely on the rise in energy prices. Other factors such as economic growth and consumption also played a role, Lagarde stressed on Friday in Dublin: "And we take all these aspects into account."
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