European Central Governor Lagarde confirms rate hike in July!

European Central Governor Christine Lagarde’s comments on Wednesday addressed the following issues:

• As per the baseline scenario, interest rates are likely to be hiked again next July.
• The ECB still has room to raise rates.
• The European Central Government sees no concrete signs of stabilizing domestic inflation.
• We are looking at a large number of variables.
• Manufacturing activity does not give much hope of a strong recovery.
• The underlying scenario does not suggest a recession.
• Interest rates are the ECB’s primary tool, not the monetary policy.
• The European Central Bank will soon end its APP reinvestment program.

At the European Central Bank’s Central Banks Forum for governors of major central banks on Wednesday, ECB Deputy Governor Luis de Guintos said the bank had already decided whether to raise interest rates again at its next meeting in July.

De Guindos added that the ECB still needs to do more work on interest rates to reduce inflation towards the bank’s 2% target. De Guintos noted that the ECB’s moves at the September meeting will be mainly data-driven.

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Tighter reports from ECB members and their expectations for upcoming interest rate decisions