Lagarde: Energy shock has caused Europe to deviate from the baseline, but conditions for a rate hike are not yet met

Golden Ten Data, April 14—European Central Bank President Christine Lagarde stated that rising energy costs have caused the eurozone to deviate from the ECB’s baseline scenario outlook, but this is not sufficient to justify an interest rate hike by the ECB. In an interview with Bloomberg TV during the IMF Spring Meeting in Washington, Lagarde said, regarding the Iran war, “we are between the baseline scenario and an adverse scenario.” When asked if this means the ECB is inclined to tighten monetary policy, she replied it does not. Lagarde said, “We have a compass, and it points to price stability based on financial stability.” Markets believe it’s only a matter of time before a rate hike. However, with the fate of peace talks between the US and Iran still uncertain, they do not expect a hike at the next meeting on April 29–30.