“This increases the likelihood that current price pressures will ease before they take hold, allowing us to meet our 2% medium-term target,” he said.
Although Lagarde herself did not commit to making any decision, several monetary policy officials maintained that the first measure will be to accelerate the exit of the bond purchase program, which will last indefinitely, but at least until October.
A rate hike could only come later, but a faster reduction could mean a hike – the first since 2011 – before the end of the year.
Markets are now expecting a 50 basis point rate hike this year, but economists are more cautious, with most forecasting the first hike at the end of the year or early 2023.
