ECB President Christine Lagarde said in an interview, “Interest rates are the most efficient tool in the present circumstances. There is every reason to believe that we will do another 50 basis points in March. After that, we will see. We are data dependent.”
“We will do more hikes if necessary to return inflation to our target of 2% in a timely manner. It will take what it will take,” She added.
“I don’t have a timeline. I have an objective, which is our target. We need to raise interest rates to a level that is sufficiently restrictive to return inflation to 2%, and to keep rates there for as long as necessary to be confident that inflation returns to 2% in a timely manner. That’s the mantra.” She said.
“Hiking rates inevitably dampens demand. And what we’re trying to do is to adjust demand. That’s the mechanical impact that we expect from what we are doing.”
