Remarks by ECB president Lagarde, in an interview with the FT


  • 2% is not a ceiling, we recognise there will be oscillation around 2%
  • We accept that it may imply on a transitory basis, moderate deviations above 2%
  • We will have to redefine our forward guidance to align with strategy review
  • Not under the illusion that every policy meeting will have unanimity
  • There will be different positioning and that is fine
  • Full transcript

The interview was conducted over the weekend and Lagarde is stamping her authority here by ensuring that there is flexibility to the ECB's inflation target, not something the hawks would like to hear of course.

In any case, she does acknowledge the differing voices on the governing council and I think that divide is going to be more of a debate moving forward if inflation pressures do threaten a push closer to 2% - though unlikely for now.

The next key focus for the ECB is still to debate on tapering in September.