ECB President Christine Lagarde reiterated that it’s “very, very likely” for the central bank to raise interest rate by 50bps this month. The decision was indicated at the last monetary policy meeting, and all recent economic indicators are confirming that this interest rate hike is likely.
“It is very likely that we will raise interest rates by 50 basis points,” she said in an interview published on Sunday. “This was a decision that was indicated at our last monetary policy meeting and all the numbers we have been seeing in recent days are confirming that this interest rate hike is very, very likely.”
“Headline inflation has gone down in recent months, and will continue to decline in the next few months,” she said. However, “core inflation, which in the euro area excludes energy and food, is too high.”
“The way forward is clear: we have to continue to take the measures needed to bring inflation back to 2%. And we will do so,” she added.
“My main concern is inflation. We don’t want to break the economy; that’s not our goal.” Lagarde said. “Our goal is to tame inflation.”
“As a central bank, interest rate hikes are our main tool to achieve that. Raising interest rates dampens demand and reduces inflationary pressures,” she added.
