The president of the European Central Bank considers it “unlikely” that the conditions to act on the price of money will be met
The president of the European Central Bank (ECB), Christine Lagarde, ruled out on Wednesday a possible rise in interest rates over the next year. From Lisbon, during a speech given on the occasion of the 175th anniversary of the Bank of Portugal, he assured that although the inflationary spikes have generated a situation of greater uncertainty, the medium-term prospects “are moderate” so that “it is very unlikely that the conditions are met next year »to modify the variables that determine the price of money. And that in the case of the general, it has remained at 0% for five years.
Market interest rates’ have risen in recent weeks, mainly as a result of greater market uncertainty due to the inflation outlook, the effects of external contagion to the expectations of official interest rates in the euro area and some doubts about the calibration of asset purchases in a post-pandemic world, “said the French.
In its guide to the future of interest rates, the Frankfurt-based institution has articulated “clearly the conditions that must be met before rates begin to rise.” And those conditions will not be met in the coming months.
The person in charge of the main issuer of the euro, has underlined in what refers to the emergency program of purchases of assets (PEPP for its acronym in English) what was already raised last week, after the last meeting of the Governing Council of the ECB. It will continue until March and the monetary policy for the following months will begin to be designed next December. “We continue to use the PEPP to safeguard favorable financing conditions and ensure that borrowing costs for all sectors of the economy are not unduly hardened,” he stressed.
Because “undue tightening of financing conditions is undesirable” in a context where purchasing power is already being eroded by higher energy and fuel bills “and would represent an unjustified headwind for recovery.”
The readjustments in debt purchases for the post-pandemic era will be announced next month. But Lagarde stressed that even after March 2022 “it will continue to be important that monetary policy, including the proper calibration of asset purchases, supports the recovery and sustainable return of inflation to our 2% target.”
.
#Lagarde #rules #rise #interest #rates