Tight policy messages at the ECB

European Central Bank (ECB) President Christine Lagarde said she would be surprised if euro zone inflation peaked, suggesting that the end of the interest rate hike process is still far away. There is no final interest rate on the horizon for the European Central Bank (ECB). ECB President Christine Lagarde said she would be surprised if euro zone inflation peaked, suggesting that the end of the interest rate hike process is still far away. Speaking to European parliamentarians in Brussels on Monday, Lagarde said, “I would like to see inflation peak in October, but I’m afraid I can’t say that. There are many uncertainties around inflation data, particularly the transmission effect of high energy prices from wholesale prices to retail prices. I would be surprised if inflation peaked.” Euro zone consumer inflation for November, to be announced on Wednesday, is expected to increase by 10.4 percent annually. Although this rate is a decrease from the 10.6 percent peak in October, it indicates a rate well above the ECB’s target of over 10 percent. Speaking on Monday, hawkish ECB members Klaas Knot and Joachim Nagel also said policy should not be eased too early.