ECB Brief: Lagarde Did Not Say That the ECB Had No More Ground to Cover

28 July 2023

By David Barwick – FRANKFURT (Econostream) – Prone though she may be to missteps, European Central Bank President Christine Lagarde got through Thursday’s post-Governing Council meeting press conference without any obvious and serious blunders, and in particular was merely misinterpreted by some to have said that the ECB had no more ground to cover.


During the Q&A, Lagarde was asked whether she agreed with the recent assessment of the IMF that the ECB might still have more ground to cover.


‘You asked, you know, do we have more ground to cover’, Lagarde eventually responded. ‘At this point in time, I wouldn’t say so, because as I said, the data that we just discussed, and the assessment of data, will actually tell us whether and how much ground we have to cover in September and at subsequent meetings.’


Declining to say that the ECB has more ground to cover is not the same as saying that the ECB has no more ground to cover, and Lagarde was doing the former, not the latter. Indeed, the former was the only right answer, given the ECB’s now much stronger data-dependence, duly referenced by Lagarde in her answer.


‘And as I said in the early part of this press conference, it may vary from one month to the other’, Lagarde added in an obvious reference to the potential for future decisions to cover more ground.


There was thus no Freudian slip in her answer, and whether the ECB has more ground to cover will be, as far as the ECB is concerned, determined by incoming data.


True, Lagarde could have easily made her answer a tad less ambiguous, e.g. by simply saying she wouldn’t ‘necessarily’ say the ECB has more ground to cover. She is however, we would remind here, a non-native speaker answering questions on the fly.