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Lagarde before the European Parliament: Gradual adjustment?
Photo: JULIEN WARNAND / EPA
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 told the European Parliament in Strasbourg.
There will only be an interest rate hike once the net bond purchases have ended.
The decision is also dependent on the current data situation.
Essentially, Lagarde was repeating statements he had made before Parliament.
At a meeting in early February, she announced that she would no longer rule out a rate hike this year.
The ECB, Lagarde said, “stands ready to review all our policies to ensure long-term inflation stays around 2%.”
As mild as these statements may sound, they are tantamount to a cautious change of course: questions about a turnaround in interest rates had previously been moderated time and again.
But the strong rise 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.
At the beginning of February, experts at the ECB revised their inflation expectations for the euro zone to three percent, a significant increase.
First, according to Lagard, she still expects high inflation rates.
"The inflation outlook, while uncertain, is likely to remain elevated for longer than previously expected, but will ease later this year."
The Council of European Central Banks, the Governing Council, will next meet on March 10th.
Then the recently rapidly rising costs for oil, gas and electricity, but also for food, should be back on the agenda.
Lagarde's statements are significant for financial experts: "An initial interest rate hike before the end of this year seems to be a very realistic scenario," said Ulrike Kastens, European economist at the fund company DWS, in early February.
jlk/dpa