Lagarde warns that the European Central Bank is prepared to diverge in the implementation of the new strategy


Christine Lagarde, the president of the European Central Bank, warned that the unification of its new inflation target could be split as early as next week when policymakers meet to discuss changes to their interest rate hike guidelines.

The bank’s interest rate setters are scheduled to meet next Thursday for the first discussion since the start of interest rate adjustments last week. Unanimously agree new strategyThis has changed the way banks make monetary policy for the first time since 2003.

Lagarde announced a consensus agreement, which includes a new 2% inflation target and a higher tolerance for temporary fluctuations above that level.

However, in a speech on Sunday, she told the Financial Times: “I don’t think every six weeks [at monetary policy meetings] We will get unanimous agreement and general acceptance because there will be some changes and some positioning will be slightly different. This is good. “

Deciding when to start reducing the European Central Bank’s pandemic stimulus plan will be an important test of the bank’s new strategy in the coming months. Many analysts expect an announcement as early as September.

Since the beginning of the pandemic, the European Central Bank has launched an emergency bond purchase program of 185 million euros and has provided banks with trillions of euros in loans at very low interest rates.

Some council members have call After inflation reached the new 2% target set by the European Central Bank earlier this year, it began to gradually reduce this stimulus, although price growth has slowed slightly since then.

The President of the European Central Bank said that she expects a battle to occur in the future. “I have neither expectation nor illusions that we will be consistent in all the decisions we make,” she said, adding that she expects to “continuously work” every time the European Central Bank meets to formulate policy.

“What we have to do now is to redefine our forward-looking guidance to align it with the strategic review,” Lagarde said, emphasizing the inclusion of new requirements for “particularly strong or durable” monetary policy when interest rates are close. Importance to their lower limit, as it is now.

But Lagarde hinted that she might resist premature tightening of current policies, which economists believe is the most aggressive stimulus measure in the history of the central bank. She said that “power” and “persistence” are the “keywords” that policymakers should not “weaken or underestimate”.

Failed to raise the inflation rate to the ECB’s target of “close to but below 2%” for most of the past decade Replaced it Lagarde called it a more “simple, reliable and symmetrical” goal. The central bank also stated that its new strategy may mean a “transition period where inflation is moderately higher than the target” before it will react.

“Facing disadvantages [economic] Shocked, you are so awesome [policy] The reaction is because you don’t want to be trapped,” Lagarde said. She added that when interest rates are close to the minimum, “you need to stay in the game for a longer period of time, which is why you say’continue’.”

The last time the European Central Bank raised interest rates was in 2011, when the Eurozone sovereign debt crisis was breaking out, and now people generally think this was a mistake.Most analysts don’t expect it to raise the policy rate from the historical low of minus 0.5% before 2024 – at least one year later than the Fed Be predicted Start to increase its rate.

Lagarde described the strategy as a “foundation document”, saying it would not make the European Central Bank more dovish. Instead, she said, this provides policymakers with additional flexibility to tolerate inflation temporarily above or below their target.

Lagarde stated that the review has studied potential new tools such as direct distribution “Helicopter money“To citizens, and expand the scope of their asset purchases, including stocks or bank bonds, without having to decide how likely the European Central Bank is to use them.

Lagarde said: “We studied everything you can think of.” “That was part of the intellectual exercise that looked at the entire field of possibility. But it didn’t go further than that.”

After a series of activities to solicit public opinion on its policies, Lagarde said that the two major concerns it heard were “loud and clear” are climate change and housing costs. The review resolved both issues at the same time.

The European Central Bank plans to adjust its modelling, banking supervision, corporate asset purchases and collateral policies to take into account climate risks. Lagarde said that these measures can not only solve the financial risks of global warming, but also serve as a “catalyst” to help achieve the EU’s green policy goals.

It will also consider including the cost of buying and owning a home as an alternative measure of inflation, and calls on EU statistics to make similar changes to the official unified consumer price index.



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