Christine Lagarde, President of the European Central Bank (ECB), emphasized that interest rates will continue to be the primary instrument in the ECB’s arsenal for combating inflation during her testimony before the Committee on Economic and Monetary Affairs (ECON) of the European Parliament in Brussels.
We’ll also lay out the fundamental guidelines for lowering the bond holdings in our asset acquisition program portfolio in December.
The balance sheet should be normalized over time in a controlled and predictable manner.
Our updated prognosis, the persistence of the shocks, the response of wages and inflation expectations, and our evaluation of transmission will all play a role in determining how far and how quickly rates need to rise. Higher wages are probably supported by robust labor markets.
To prevent escalating inflationary pressures, fiscal policy must be thoughtful.
From the multi-month high it reached near 1.0500 earlier in the day, the EUR/USD fell down, and it was last seen trading at 1.0445, up 0.5% on the day.
