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Q&A Begins, Lagarde Says Expect 50bp Hike Pace For A Period Of Time

ECB
Prepared comments conclude, onto the Q&A:
  • Q: On "significantly" higher rates "at a steady pace", does that mean 50bp hikes in future, and how many? And on QT, how do you decide which bonds to reinvest?
  • A: One of the key messages in addition to the hike today was not only that we would raise rates further, which we'd said before, but we also say that today we judged that interest rates will still have to rise significantly at a steady pace to reach levels that are sufficiently restrictive to ensure a timely return of inflation to our 2% medium-term target.
  • What does that mean? You have to read it together with the "steady pace". It is obvious that on the basis of the data we have at the moment, means that we should expect to raise interest rates at a 50bp pace for a period of time. So significant, and a steady pace. Which means we have made progress over the course of the past few months, but we have logner to go, and we are in for a long game.
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