The president of the European Central Bank (ECB), Christine Lagarde, said that the institution intends to raise its interest rates by another 50 basis points (bp) at the March meeting, ratifying the statement of the monetary policy decision announced this Thursday (2 ).
At a press conference, Lagarde said she expected economic activity in the euro zone to remain subdued in the short term, although it was proving to be more resilient than previously thought.
She also commented that supply constraints are steadily easing.
Christine Lagarde also said that price pressures remain strong, in part because of rising energy costs, but noted that energy prices are likely to rise less than forecast in December. According to her, fiscal policies may intensify inflationary pressures.
The leader also predicted that measures by governments in the euro zone to help consumers and companies pay their energy bills will help inflation to slow down.
Earlier, the ECB raised its interest rates by 50 basis points, as expected, and signaled a similar adjustment for the March meeting.
Peak
The president of the European Central Bank also said that the institution will not reach its peak of interest rates in March. “I wouldn’t say that the disinflationary process is already ‘in play’. We have to look at energy costs because they could spill over into inflation,” she pointed out.
He added: “A stronger China recovery could boost commodity prices.”
necessary discharges
Christine Lagarde also said that, in all scenarios, significant rate hikes will be needed, at a steady pace. According to her, there is a “strong consensus” on the intentions of raising interest rates in March and it is not “irrevocable”.
“I don’t think of a scenario that doesn’t have an increase of 50 basis points in March, only in an extreme case. We know that we are not finished and that we will need to assess the pace of interest rate hikes,” said the director during a press conference. “Our decisions will continue to depend on data,” he told reporters.
For the central banker, the risks to economic growth have become more balanced. “Stronger China’s recovery could boost commodity prices,” she concluded.
Source: CNN Brasil
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