“When you look at the main drivers of inflation today, whether it’s food or commodities or energy, we don’t see components or a direction that leads me to believe that we have peaked in inflation and that it will come down anytime soon,” he said. .
The ECB experts, he added, believe that the risks for inflation are upwards, which is why the institution will continue trying to moderate prices “with all the tools at its disposal” and “the first and most efficient in these circumstances are the rates of interest”.
Lagarde reiterated several times that the ECB plans to continue applying interest rate increases whose magnitude and speed will be decided based on the data available to them – the institution will update its projections in December – and “meeting by meeting”.
“It has to be a high enough interest rate to deliver the medium-term 2% inflation target that we have. It could take us into restrictive territory, but it’s something we’ll discuss meeting by meeting and based on the data”, she insisted, asked about the level that the institution expects to reach.
Despite the fact that since July the ECB has increased interest rates by 200 basis points, which had been at historic lows for a decade, the monetary policy of the European issuer continues to be accommodative and supporting demand, recalled Lagarde.
“We have to continue raising interest rates. It is something that we have said and that we will decide. My suspicion is that we still have a long way to go and we have not finished with inflation,” he insisted.
