Lates News

European Central Bank President Lagarde said that if the inflation shock triggered by the war in Iran gets out of control, the ECB could raise interest rates as early as April. Lagarde stated at a meeting, "If the situation requires, we are prepared to adjust our policy at any meeting." However, Lagarde emphasized that it is still "too early" to make any decisions on interest rates because policymakers still need to "assess the nature, scale, and persistence of the expected significant increase in inflation caused by the rise in energy prices." Lagarde told central bank observers at the meeting that the impact of this conflict is not yet enough to prompt the ECB to take immediate action. She said, "If the current energy market shock can be controlled, its impact on overall inflation may be limited." She stressed that central bank officials "cannot reduce energy prices" but must focus on its impact on "broad-based" inflation and the "second-round effects generated through wages and inflation expectations."