Lagarde recently announced further rate hikes.
(Photo: dpa)
Frankfurt, Madrid According to ECB boss Christine Lagarde, the interest rate decisions of the US Federal Reserve are not a guideline for monetary policy in the euro zone. The Federal Reserve is influencing the global markets with its monetary policy, the Frenchwoman said on Thursday at a conference of the Central Bank of Latvia in Riga. But the ECB cannot simply imitate the decisions of the US Federal Reserve.
The economic situation on both sides of the Atlantic is not the same. Therefore, the ECB cannot proceed “at the same pace” as the Fed in the fight against escalating inflation.
The Federal Reserve on Wednesday hiked interest rates by three-quarters of a percentage point for the fourth consecutive month – to a new range of 3.75 to 4.00 percent. At the same time, Fed Chair Jerome Powell signaled that the central bank could slow down the pace of interest rate hikes in December or February.
The ECB also recently increased key interest rates by 0.75 percentage points, taking another major step. The deposit rate that is decisive on the financial markets is now 1.50 percent. Lagarde also promised further increases. She now emphasized in Riga that a recession will not be enough to keep inflation in check.
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Bundesbank boss Joachim Nagel is pleading for further interest rate hikes in the fight against high inflation. The ECB should not refrain from further interest rate hikes so that the inflation rate can be brought down to the medium-term target, he said at a round of talks in Madrid on Thursday.
Nagel recently said in a newspaper interview that inflation is persistent, so monetary policy must be even more persistent. It is important to act decisively.
Meanwhile, ECB Director Fabio Panetta has warned against tightening monetary policy too sharply. It is important to avoid raising interest rates too quickly, the Italian said on Thursday. In his view, this could have an excessive impact on economic growth, real estate prices and the financial markets.
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