FX.co ★ Christine Lagarde in spotlight at her debut policy meeting

The recent press conference of new ECB head Christine Lagarde did not impress market participants. The new ECB president seems to be cautious in her statements as well as her predecessor Mario Draghi. She appeals to the known facts instead of giving any real hints about the upcoming changes. She noted that growing inflation was a positive sign. At the same time, she added that the inflation target was not achieved and was unlikely to be reached soon. Christine Lagarde outlined the deadlines for the end of the quantitative easing program. However, she did not say the exact time only mentioning that this would happen shortly before the ECB raises the key rate. She also made some statements that did not bring much clarity about the ECB future policy. Thus, speaking about inflation, Christine Lagarde noted, “In the light of the subdued inflation outlook, the Governing Council reiterated the need for monetary policy to remain highly accommodative for a prolonged period of time to support underlying inflation pressures and headline inflation developments over the medium term.” She also added that “the risks to the euro area growth outlook relating to geopolitical factors, rising protectionism and vulnerabilities in emerging markets remain tilted to the downside, but have become somewhat less pronounced.” In conclusion, the ECB president talked about the regulator’s readiness for adjustments, “the Governing Council continues to stand ready to adjust all of its instruments as appropriate to ensure that inflation moves towards its aim in a sustained manner in line with its commitment to symmetry.”