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Lagarde - Building confidence in the path ahead

Speech by Christine Lagarde, President of the ECB, at The ECB and its Watchers XXIV Conference, organised by the Institute for Monetary and Financial Stability, Goethe University, Frankfurt am Main

In her speech, Christine Lagarde discusses the complexity faced by monetary policymakers since the pandemic, particularly in relation to inflation. She highlights the importance of a policy framework based on three criteria: the inflation outlook, the dynamics of underlying inflation, and the strength of monetary transmission. Lagarde acknowledges the challenges in calibrating policy accurately due to lower visibility of the future and the potential changes in the transmission of monetary policy. She explains how their framework has guided decisions through different phases of the policy cycle, including the tightening phase, where they aimed to break the persistence of inflation. Lagarde also discusses the current holding phase, where inflation has been declining and projections indicate a return to the target. However, she notes that domestic price pressures remain strong, particularly in services inflation. Lagarde emphasizes the need to see further progress on the disinflationary path before dialing back the restrictive policy stance. Important factors to consider include wage growth, profit margins, and productivity growth. Lagarde concludes by highlighting the data that will be crucial in determining the next phase of the policy cycle and the importance of remaining data-dependent and continually evaluating the policy framework.


Positivity: 80
Uncertainty: 60

Lane - The economic outlook and monetary policy

Slides by Philip R. Lane, Member of the Executive Board of the ECB, at the seminar at Imperial College Business School in London


In this speech, Philip R. Lane emphasizes the commitment of the Eurosystem to maintain price stability and support the economic recovery in the euro area. He highlights that the recovery process will be gradual and uneven across different sectors and regions. The monetary policy measures will be determined by the economic outlook and inflation path, with a strong determination to ensure inflation stabilizes at the aim of 2 percent in the medium term. Philip R. Lane also mentions the importance of the pandemic emergency purchase program in providing crucial support to the euro area economy. He reassures that if there are any unwarranted tightening in financial conditions that could jeopardize the inflation outlook, necessary actions will be taken.


Positivity Score: 80
Uncertainty Score: 60