ECB President Christine Lagarde said in an interview that raising interest rates “would not solve any of the current problems.” Instead, “if we acted too hastily now, the recovery of our economies could be considerably weaker and jobs would be jeopardized.”
“The U.S. economy is overheated, whereas our economy is far from being that,” she said. “That’s why we can — and must — proceed more cautiously. We don’t want to choke off the recovery.”
“Inflation may turn out to be higher than we projected in December,” Lagarde said. “We will analyze that in March, and then take it from there.” She also noted that inflation would exceed 2% target in medium term only if wages were to “significantly and persistently” break that level. “We are not seeing that at the moment at all,” she said. “In most euro-area countries, including Germany, wage demands are very moderate.”
