FRANKFURT (Reuters) – Christine Lagarde, the President of the European Central Bank (ECB), on Monday left all options open regarding the size and number of future interest rate hikes from the Frankfurt institute, saying that will depend on a number of variables.
“How far we need to go and the pace needed will depend on our updated outlook, the persistence of shocks, wage developments and inflation expectations,” she told the Commission. Economic and Monetary Affairs of the European Parliament.
Investors are trying to determine the extent of the ECB’s rate hike after its December meeting and the debate is on a 50 or 75 basis point hike. They are also seeking to determine how far the ECB may ultimately be led to raise its rates.
According to Christine Lagarde, the peak of inflation has not yet been reached and there is a risk that it will become higher than the level currently expected.
“We don’t see the elements or the trend that would lead me to believe that we have reached the peak of inflation and that it will come down in the short term,” she said.
“Whenever I ask my leading economists at the ECB (…) about this risk, the answer I get at the moment is (that) the risk is on the rise, without precision on this rise”, has she added.
(Report by Francesco Canepa; French version by Claude Chendjou, edited by Sophie Louet and Blandine Hénault)
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