ECB’s Lagarde satisfied with inflation progress, eyes growth impact on policy

At an event today, ECB President Christine Lagarde expressed contentment with the current inflation levels, stating that the central bank is “rather satisfied” as inflation has slowed to below the 2% target.

However, she emphasized that the central bank is keeping a close watch on economic growth, as it significantly influences inflationary trends. Lagarde pointed out, “We are attentive to growth because it impacts inflation. It’s different from the Fed,” highlighting a key difference in policy focus compared to Fed.

Separately, Chief Economist Philip Lane acknowledged that while “some of the recent data raised some questions about the recovery,” the overall outlook remains positive.

Lane affirmed that the narrative of a good economic recovery is still “very close to the baseline.” Lane highlighted “fundamental reasons” to expect a rebound in consumption and investment for the remainder of this year and into the next.