Lagarde (ECB): 'The fight against inflation is not over. A 'soft landing' is not yet guaranteed'
No indication, therefore, of the next rate cut: 'We must remain vigilant'.
3' min read
3' min read
"We have come a long way in the fight against inflation... but our work is not done and we must remain vigilant". This was said by ECB President Christine Lagarde in her speech this evening to the participants of the Ecb Forum, an annual event held in Sintra, Portugal, to discuss monetary policy. No indication, therefore, of the next rate cut.
"Given the size of the inflation shock, a 'soft landing' is not yet guaranteed," Lagarde warned, assessing the costs of monetary policy in terms of the impact on the economy of raising rates.
The success of a soft landing, Lagarde defined it as having managed to 'avoid a recession or a sharp deterioration in employment'.
"But while our policy path has helped tame inflation, it has also dampened economic growth," Lagarde pointed out, adding that "Interest rates have risen steadily and remained high while the economy has stagnated for five consecutive quarters."
"This is inevitable when central banks face shocks that push inflation and output in opposite directions. But this time, the costs of disinflation have been contained compared to similar episodes in the past,' Lagarde pointed out, highlighting the resilience of the labour market, the high level of employment and the low level of unemployment.
