ECB is Not Done Hiking Yet and Not Pausing, Lagarde Says
21 May 2023
By Xavier D’Arcy – FRANKFURT (Econostream) – The European Central Bank will not pause its rate hikes at its upcoming meeting, based on data available today, President Christine Lagarde said on Sunday.
In an interview with Dutch television interview programme Buitenhof, she said that the ECB was ‘not done yet’ with rate hikes and was ‘not pausing based on the information I have today.’
‘I think we covered a large chunk of the journey towards taming inflation and bringing it back to our target’, she said. ‘We responded fast in significant strides, using 50bp at a time, 75bp once, and 25 on the last decision, but we are not done; we still have ground to cover if I look at my numbers today and the situation today.’
The ECB had chosen to be data dependent ‘because so many things have gone wrong, can go wrong, that we cannot give what we call ‘forward guidance’ and say: ‘we will do this’ and then don't… we have to look at numbers.’
‘I don't have a predetermined number in my mind’, for the ECB’s terminal rate, she said. ‘What I know is that we will be data dependent and we will not only look at models and what they give us. We will look at underlying inflation numbers, what does it mean for people, what are the sticky elements of inflation, and we will look at whether or not our monetary policy has an impact on the economy and on inflation.’