Christine Lagarde, president of the European Central Bank (ECB), has left open the possibility of future interest rate hikes, following a possible first hike in June.
In a speech today, she reiterated that “in terms of data that is important to our policy decisions, we will know a little more by April and a lot more by June.” Beyond that, the path of monetary policy is unclear.
“Our decisions will have to remain data-driven and meeting-to-meeting, responding to new information as it comes in,” he told a conference in Frankfurt. “This means that, even after the first rate cut, we cannot pre-commit to a specific course for them.”
According to the protothema, with the timing of the first decline becoming increasingly clear, the debate is shifting to how quickly the ECB will withdraw its historic campaign of rate hikes and where the cost of borrowing will ultimately end up.
As Bloomberg notes, some officials, such as Greek central banker Giannis Stournaras, have raised the possibility of a series of moves this year – in line with investor expectations. Others have remained more obscure. ECB Vice President Luis de Guido said on Tuesday that the ECB should adjust its policy “based on the data we see”.
The central bank meets on Thursday to decide its next monetary policy move and is widely expected to keep interest rates unchanged at 5.25% as it considers when to begin tapering.
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