European Central Bank president Christine Lagarde spoke over the weekend, saying underlying inflation in the eurozone is still strong and wage growth is “historically high”.
Lagarde was speaking at the International Monetary Fund’s annual meetings in Marrakech, Morocco. The comments from Lagarde didn’t add anything fresh, she largely repeated her previous assessment of the economy, while stressing that progress is still needed in taming consumer prices.
- “labor market still shows no real sign of weakening”
- “participation in the unemployment and unemployment in nominal numbers are quite striking”
Said she still expects inflation to slow to the 2% target in 2025 (this is the ECB forecast).
More:
- “Downside risks include weaker demand, due for example to a stronger transmission of monetary policy or to a worsening of the international economic environment,”
- “Growth could be slower if the effects of monetary policy turn out to be more forceful than expected, or if the world economy weakens further and geopolitical risks intensify,”
- “Growth could also be higher than projected if the strong labour market, rising real incomes, and receding uncertainty boost confidence among consumers and businesses and lead them to spend more.”
On the policy outlook, Lagarde insisted on keeping the bank’s options open:
- “It’s not a question of being hawkish or dovish, but it requires us at this point in time to be patient, as supply shocks reverse and new shocks arrive, and be attentive to ensure that inflation expectations remain anchored when inflation is still too high,”
ECB’s President Lagarde