Natixis IM Analyst: Lagarde Should Frame ECB Rate Increase as a Dovish Hike

A Natixis Investment Managers analyst said European Central Bank President Christine Lagarde may need to communicate carefully at a press conference even as markets have fully priced in an ECB rate increase this week. According to Jin10, Mabrouk Chetouane, global market strategy head at Natixis IM, said there are currently no clear signals that higher energy prices are spilling over into the real economy, and the weakness of Europe’s economic cycle appears to support a more moderate approach to tackling inflation. However, he added that the ECB’s Governing Council is still likely to raise interest rates in line with its mandate and its focus on anchoring market expectations, in order to bolster credibility and demonstrate policy responsiveness.