Lagarde Q&A: Inflation outlook plus transition protection instrument led us to 50 bps hike

• Governing council made 2 important decisions. The first was on hikes, the second was the 'transition protection instrument' (TPI)
• Decision on transmission instrument was unanimous
• The situation has changed in relations to transmission
• Realization of upside risks on inflation Inflation Inflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general level of prices where a given currency effectively buys less than it did in prior periods.In terms of assessing the strength or currencies, and by extension foreign exchange, inflation or measures of it are extremely influential. Inflation stems from the overall creation of money. This money is m Inflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general level of prices where a given currency effectively buys less than it did in prior periods.In terms of assessing the strength or currencies, and by extension foreign exchange, inflation or measures of it are extremely influential. Inflation stems from the overall creation of money. This money is m Read this Term plus the transmission protection instrument led us to decide on a larger hike
• All members of governing council rallied to consensus of 50 bps hike
• Governing Council will have the entire discretion to make the decision on TPI
• Cites 'multiple indicators' that will be used to inform governing council
• Prior guidance on Sept rate move no longer applies
• We will be data-dependent
• Publication of purchases will take place in due course, according to what we decide
• In terms of sterilization, we will avoid interference with the stance and will address issue of excess liquidity
• ECB accelerating hikes, not changing final rate level
• We're 'capable of going big' to address transmission risks. There is no limit
• No recession under our baseline
• Governing Council would rather not use TPI, would not hesitate if it has to be done
• We want to raise rates to a neutral level

This is insane. The ECB is basically saying 'we'll do whatever we want' on spreads and offering no details on criteria. It's a power grab and runs against any kind of transparency.

On interest rates, there's no plan or guidance anymore. It's basically 'wait and see'. She said they want to get rates to a neutral level but then said they don't know what neutral is.