MNI BRIEF: Lagarde-ECB To Stay Restrictive As Long As It Takes

ECB President Christine Lagarde said Friday monetary policy must remain tight for as long as it takes in order to bring down inflation.

"In this era of uncertainty, it is even more important that central banks provide a nominal anchor for the economy and ensure price stability in line with their respective mandates," she said in a speech at the Federal Reserve Bank of Kansas City Jackson Hole conference. "In the current environment, this means – for the ECB – setting interest rates at sufficiently restrictive levels for as long as necessary to achieve a timely return of inflation to our 2% medium-term target."

The ECB has raised its interest rate on bank deposits for nine meetings in a row to 3.75%, matching its highest level since the euro's launch in 1999. But there are signs that it could pause hikes at its next gathering in September. (See MNI SOURCES: ECB Mulls September Hawkish Pause, Eyes On August CPI)