In the hearing of a European Parliament committee, ECB President Christine Lagarde said, “most measures of longer-term inflation expectations currently stand at around two per cent. However, signs of recent above-target revisions to some indicators warrant continued monitoring.”
“The risks to the inflation outlook are primarily on the upside, mainly reflecting the possibility of further major disruptions in energy supplies,” she said. “While these risk factors are the same for growth, their effect would be the opposite: they would increase inflation but reduce growth.”
“We expect to raise interest rates further over the next several meetings to dampen demand and guard against the risk of a persistent upward shift in inflation expectations… Our future policy rate decisions will continue to be data-dependent and follow a meeting-by-meeting approach,” she said.