European Central Bank
Lagarde: Monetary policy will only be adjusted gradually
ECB President Christine Lagarde in the plenary chamber of the European Parliament. She said the European Central Bank’s loose monetary policy should only be adjusted gradually. Photo: Philipp von Ditfurth/dpa
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ECB President Christine Lagarde has announced that the European Central Bank will gradually change its loose monetary policy.
The European Central Bank (ECB) only wants to phase out its loose monetary policy step by step. “Any adjustments to our policy will be gradual,” ECB President Christine Lagarde said in front of the European Parliament in Strasbourg.
There will only be an interest rate hike once the net bond purchases have ended. Lagarde reiterated that every decision is data dependent.
Essentially, Lagarde repeated statements made recently. She had no longer ruled out a key interest rate hike this year. The sharp increase in consumer prices is putting the ECB under pressure.
The inflation rate rose to 5.1 percent in the euro zone in January. The ECB is aiming for an inflation rate of 2 percent in the medium term. First of all, Lagarde expects high inflation rates to continue. “While the outlook for inflation is uncertain, it is likely to remain elevated for longer than previously expected, but will ease over the course of this year.”
According to Lagarde, economic growth is likely to remain subdued in the first quarter. The ongoing Omikron wave is burdening the economy. However, the economic recovery is continuing.