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Lagarde On Rate Hikes: "Any Decision Is Fruit Of Compromise"

ECB

Q: Could you say it was a compromise to decide three 50bp hikes in a row? Does it mean that this could continue in May?

  • A: Any decision is a fruit of compromise. All governors are passionate about the rationale and analysis behind what we do. Some take particular views, others take other views. They come to these meetings informed by their staff and the work they have done at home. We have to stay the course because we not done.

Q: What’s your message for those asking for salary increases? At what point do these salary increases become a risk for inflation?

  • A: Wages take a critical role, particularly in the services sector. We know that there is an element of catch up that is at play. Headline inflation numbers matter a lot. It is important that there is a forward looking approach to appreciate the trend in wages.

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