European Central Bank President Christine Lagarde said the bank is reviewing incoming indicators to judge whether a December hike is needed. The ECB held rates steady in November, while several policymakers have signalled another move may be likely.
Outgoing President Christine Lagarde said on Thursday that the European Central Bank is looking at indicators to see if an interest rate hike could be warranted next month. The bank held rates steady in November.
Last week the ECB left its key deposit rate at 2.5%. However, a long list of policymakers, including the heads of the German and Italian central banks, have already signalled another move in December may be likely.
Speaking at a financial literacy conference in Milan, she told the students that many indicators will arrive between now and December to help determine whether a hike is necessary.
She called the current situation very hard and said energy costs are "bringing growth down and prices up." On the other hand, she said artificial intelligence is fuelling demand for investments and helping make the euro zone economy more resilient.
Lagarde said it is very difficult to disentangle the supply-driven and the demand-driven shock, and that doing so requires subtlety so policymakers do not apply the interest rate tool like a hammer. Equally, she said, the tools must be applied, because she does not want inflation expectations to run away or inflation to penetrate throughout the economy and produce second-round effects.
Months ahead of the formal end of her mandate, Lagarde has said she will step down on February 7, 2027.
Source: Reuters via Investing.com
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