Lagarde (ECB) evokes a strong probability of rate hikes this year | Photo credits: Michael Probst/AP/Sipa
WASHINGTON, April 22 (Reuters) – The European Central Bank is expected to end its bond-buying program at the start of the third quarter and raise rates before the end of the year, its chair, Christine The guard.
“If the situation continues as expected for the moment, there is a strong probability that rates will be raised before the end of the year,” she said.
“How much, how often, all of that remains to be seen and will depend on the data,” she added.
Christine Lagarde previously said last week that the end of ECB bond purchases could come at any time between the start and end of the third quarter. She clarified on Friday that this deadline was now set at the start of the third quarter.
Such a timing suggests that the ECB could raise rates at its July 21 meeting, as an end to bond purchases is seen as a precondition for any move up in the cost of credit.
Eurozone inflation hit 7.5% last month, almost four times the ECB’s 2% target, and could continue to rise in the coming months. (Report Balazs Koranyi; French version Claude Chendjou, edited by Jean-Michel Bélot)