Lagarde: Price increase dependent on inflation outlook

0
5


By Scott Kanowski

Investing.com — The European Central Bank’s future rate path – including how far and how fast it raises borrowing costs – will depend on inflation expectations, according to ECB President Christine Lagarde.

Speaking at a conference in Frankfurt, Lagarde said the ECB will have to hike “further”, suggesting it will unveil a hike at its fourth consecutive meeting in December in a bid to bring prices back to the medium-term target of 2%.

“Interest rates have been and will remain the main tool for adjusting our policy stance,” Lagarde added. “But we also have to normalize our other policy instruments and thus strengthen the impulse from our pricing policy.”

She also said it was “appropriate” that large-scale asset purchases, which the ECB used to support the eurozone economy during the COVID-19 pandemic, be reversed in a “measured and predictable manner”.

Lagarde said next month the ECB will outline key principles for reducing its bond holdings.

The rate traded slightly higher against the US dollar on Friday.



Source link

LEAVE A REPLY

Please enter your comment!
Please enter your name here