ECB President Christine Lagarde: No Signs of Second-Round Effects Beyond Forecasts

According to Jin10, ECB President Christine Lagarde said the ECB had not observed signs of second-round effects beyond its forecasts. It is closely monitoring forward-looking indicators, including multi-year wage agreements and companies’ wage expectations, but has not yet seen any signs of change. Lagarde said it was too early to prejudge whether forecasts would be raised, but noted that important changes had occurred since the ECB’s September forecasts. The energy futures curve had risen, which would affect both inflation and economic growth, although oil prices had recently fallen. Long-term interest rates had also risen. The ECB’s forecasts will determine how these factors affect medium-term inflation.