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ECB raised key rates by 25 bps in its May monetary policy decision following a 50-bps rate hike last meeting, and matching expectations from most anal
[See the full post at: ECB Raises Rates Another 25bps, Highest Level Since July 2008]Lagarde opening statement:
The inflation outlook continues to be too high and too long
Incoming information broadly supports medium-term outlook that we formed at our previous meeting
We will continue to follow a data-dependent approach
Private domestic demand, especially consumption, is likely to remain weak
Business and consumer confidence have improved but are lower than pre-war
Manufacturing sector is working through a backlog of orders but prospects worsening
Government should roll back energy support measures promptly as energy crisis fades
Price pressures remain strong
Inflation is still being pushed up but the gradual pass through of previous energy price rises
Lagarde no longer says growth risks are to the downsideLagarde Q&A:
We know that we have more ground to cover
25 bps hike had almost unanimous support
All governors determined to tame inflation
Mood was very focused and attentive to all data
We have covered a lot of ground… we are continuing this hiking process
This is a journey, we have not arrived yet
Some governors suggested 50 bps was appropriate, some said 25 bps but none said no change
There was a very strong consensus around the path we chose
Reports from corporates regarding borrowing suggest to us that rates are restrictive
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