The European Central Bank has more ground to cover in its campaign of interest-rate increases, according to President Christine Lagarde.
(Bloomberg) — The European Central Bank has more ground to cover in its campaign of interest-rate increases, according to President Christine Lagarde.
“Barring a material change to our baseline, it is very likely that we will continue to increase rates at our next policy meeting in July,” Lagarde said Friday at a dinner of the Group of 30, an independent association fronted by prominent former officials.
“Thereafter, we will continue to follow a data-dependent approach to determining the appropriate level and duration of restriction,” she said.
The comments are in line with Lagarde’s statements on Thursday after the ECB raised borrowing costs for an eighth consecutive meeting. That brings monetary tightening since last July to an unprecedented 400 basis points.
While the majority of analysts still expects the ECB to pause after next month, markets are almost fully pricing another step beyond that — boosted by a slight upward revision this week in quarterly inflation projections.
“Inflation has been coming down, with the latest data showing a broad-based decline,” Lagarde said. “But it is still projected to remain too high for too long.”
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