ECB president Lagarde talks of 'unwarranted' market moves, but who gets to decide what is warranted?
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Ah, here we go again. Just when you think that the bond market is finally starting to hold governments accountable for their fiscal decisions, along comes the ECB with a reminder to everyone that it has tools to come to the rescue. How convenient. ECB president Lagarde remarked y
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4 itemsComing up: What Lagarde may say next, two days after the ECB's rate rise
Lagarde keeps the door open for further ECB rate hikes
The desk interprets today’s press conference as a strategic signaling maneuver by the ECB, indicating a readiness to consider additional rate hikes in response to rising inflationary pressures. As President Lagarde noted, while the latest 25 basis point increase to 2.25% may seem modest, it effectively lays the groundwork against potential economic stagnation amidst broader inflationary concerns. Per the full note from ing-think, this shift is partly a response to past hesitations in tackling inflation, which Lagarde acknowledged. Given the ECB's historical context, traders should be mindful of the potential for further tightening if inflation dynamics worsen, especially as external geopolitical factors continue to reflect inflationary trends in Europe.
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