Lagarde: Won't Speculate On What Fed Does, No Discussion On Balance Sheet

Lagarde fields questions on the impact of US policy and macro developments on ECB policy, as well as on the balance sheet:

• Q: Would hot inflation data out of the US and the market response impact the way you see the ECB monetary policy path going forward?
• A: I have said in the past that we are data dependent and not Fed-dependent. Obviously anything that happens matters to us and is embedded in the June projection. The US is a major economy, so all of that finds its way into our projections.
• Q: Clearly if the Fed doesn’t cut, it will impact the euro-dollar exchange rate. Does that concern you?
• A: I would not speculate on what other central banks may or may not do. Consequences in terms of impact on price stability needs to be taken into account and is monitored carefully. All of that will be included in the projection. We don’t target on, or comment on, exchange rates.
• Q: Did you discuss shrinking the balance sheet faster than currently planned?
• A: The size of our balance sheet has significantly reduced already. There was no further discussion on this.