The ECB’s position on interest rates
The European Central Bank (ECB) has recently reaffirmed its determination to keep interest rates at sufficiently restrictive levels. This approach is critical to achieving the medium-term inflation objective set at 2%. Christine Lagarde, president of the ECB, stressed the importance of a data-based approach, which will guide the decisions of the Governing Council based on current economic conditions
.
Data-based decisions and inflation prospects
During a speech at the International Monetary Fund, Lagarde clarified that interest rate decisions are not predetermined. Each meeting of the Governing Council will be influenced by the assessment of the inflation outlook and the strength of monetary policy transmission. This means that the ECB will adapt to economic circumstances, avoiding committing itself to a specific path for interest rates. Flexibility is therefore a key element of the ECB’s strategy.
Impact on markets and consumers
Lagarde’s statements have a significant impact on financial markets and consumers. A high interest rate can influence household and investor spending decisions. In addition, the consumer confidence index, such as that of the University of Michigan, is a crucial indicator for understanding how monetary policies influence the real economy. In October, this index reached a six-month high, suggesting some consumer resilience despite economic uncertainties
.