Interest Rate Hikes Unlikely for 2022, Says ECB’s Lagarde

Source: European Central Bank

European Central Bank President Christine Lagarde emphasized that the “conditions to raise rates are unlikely to be met next year.” Euro Stoxx 50 down -0.33%, EUR USD -0.63%

• Lagarde made the comments to Frankfurt European Banking Congress when she warned that the ECB “must not rush into a premature tightening” of monetary policy.
• The euro dropped to $1.1301 against the dollar after Lagarde’s comments.
• Energy inflation had increased to 23.7% in October, the fastest expansion rate since the monetary union started. The increase contributed 2.2% to the overall inflation of 4.1% in October.
• This surge in prices is linked to the reopening of the EU’s economy and recovery in the global demand and other factors.
• Lagarde has already sought to ease off expectations of an interest rate hike in the coming year after the ECB’s October policy meeting.