(Finance) – The number one of the ECB Christine Lagarde confirms that a rate hike is imminent and it could happen in Julyonce the net asset purchases program, scheduled for the beginning of the third quarter, is completed. The rise in rates instead it will happen “some time after”Lagarde reiterates, specifying that we talk about weeks.
“With inflation set to remain high for some time, it will be It is essential to demonstrate our commitment to price stability to anchor inflation expectations and contain second-round effects. This will help ensure that theinflation returns to 2% once the various shocks of the offer have been overcome “, says the head of the Frankfurt institute, in her speech at the ceremony for the 30th anniversary of the Central Bank of Slovenia.
Lagarde also returns to mention the optionality criterion of monetary policy which – he emphasizes – “creates space to respond to the surprises of inflation in a timely and efficient manner”. “At the same time, in the face of uncertainty about growth – continues Lagarde – gradualism and flexibility the following will remain important: gradualism on the pace of monetary policy adjustment; and flexibility to ensure the smooth transmission of monetary policy as needed. “
The President confirms that there is “one well-defined sequence of events for the normalization process. In the first place, we will terminate the net purchases under the asset purchase program. Judging by the incoming data, my expectation is that they should finish early in the third quarter. The first rate hikebased on the ECB’s forward guidance, it will take place some time after the end of net asset purchases. We have not yet precisely defined the notion of “a certain time”, but I have been very clear that this could mean a period of a few weeks. After the first rate hike, the normalization process will be gradual. “
Speaking of the monetary policy normalization process, Lagarde recalled that “the initial response of the ECB” energy shocks and the war in Ukraine was marked by the “patience and perseverance ” typical of phases in which “we get out of a long period of too low inflation. road to the gradual normalization of policies“. This is due to the fact that” the medium-term inflation outlook is changing “and” inflation projections increasingly indicate that inflation is in line with the medium-term objective !.