ECB Could Continue on Same Path After March, Lagarde Says
2 March 2023
By Xavier D’Arcy – FRANKFURT (Econostream) – European Central Bank President Christine Lagarde on Thursday said it was possible that the ECB's monetary policy would remain on its current path even after the March meeting of the Governing Council.
Speaking on Spanish morning television show Espejo Publico, Lagarde said that the ECB was almost certain to hike by 50bp in March.
Asked about rate hikes thereafter, she said that ‘it’s possible that we will continue on that path … by which amount at each and every meeting, it’s impossible to say at this point in time.’
There was ‘every reason to believe’ the ECB would hike by 50bp in March, she said. ‘We look at the data, we look at the outlook and the projections’, she said, ‘but as far as March is concerned, I don't have many doubts.’
Lagarde reiterated that the ECB would ultimately make its decisions meeting-by-meeting: ‘The real honest answer is that we will decide based on data.’
Inflation was ‘way too high’, she said. She saw a downward trend in price growth, despite recent data surprising to the upside: ‘It has gone up a little bit in February... but it is not stable declining.’
The ECB was ‘confident’ that from March onwards, base effects would contribute to bringing inflation down further, she said, but inflation would still be ‘just way too high’.
‘My hope is that we can bring [inflation] down as rapidly as we can, but it is going to take time’, she said. Inflation was a ‘poison’ that had ‘penetrated’ throughout the Eurozone economy, she said. ‘We need to tame that, we need to stop it’, she concluded.
A return to low interest rates was unlikely, she indicated, saying that ‘rates will not go back to where they were two, three or four years ago.’