ECB’s Lagarde: Commitment to hike rates depends on data

  • Remarks by ECB President Christine Lagarde

Justin Low

Tuesday 06/28/2022 | 08:09 GMT-0

06/28/2022 | 08:09 GMT-0

  • Intention to raise rates by 25 basis points in July
  • It is optional to increase more in September
  • Whether inflation
  • Beyond September, a “gradual but sustained” trajectory of further rate hikes will be appropriate
  • To address fragmentation, the ECB will be flexible in reinvesting maturing repayments under the PEPP
  • Also decided to expedite the completion of the design of a new instrument
  • The new instrument will have to be effective, while being proportionate and containing sufficient safeguards to preserve a sound budgetary policy
  • Full Speech

There’s nothing in there that wasn’t already communicated by their political decision and press conference earlier this month. It’s basically a rehash of those details, although it does mention that the new instrument to deal with fragmentation will allow rates “to rise as much as necessary”. That leaves a lot to interpretation, I would say.

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