MNI BRIEF: More Ground To Cover If Uncertainty Eases-Lagarde
ECB President Lagarde emphasises caveats, but accepts more will need to be done to stem inflation if projections are right.
The European Central Bank will need to further tighten monetary policy if uncertainty continues to reduce, said President Christine Lagarde, but she emphasised uncertainty in the wake of questions over banks in the U.S. Switzerland in comments after Thursday's policy statement provided no firm rate guidance.
Moving forward, policy will be determined by its assessment of "the inflation outlook in light of the incoming economic and financial data, the dynamics of underlying inflation, and the strength of monetary policy transmission," Lagarde said, pointing to the statement.
But, she added, "'if our baseline was to persist, as the (financial sector) uncertainty reduces we know we have a lot more ground to cover, but it’s a big caveat."
The ECB hiked its key interest rates by 50 bps across the board Thursday, leaving the key deposit rate at 3.0%. (MNI SOURCES: ECB Clings To 50Bp Hike Plan Amid Market Turmoil)