“Monetary policy is returning to basics; the era of extraordinary pressures is over,” this was the statement of European Central Bank President Christine Lagarde at the European Central Bank forum held on Monday, June 29, in Sintra, Portugal. The speech marked a new direction for the ECB, which has returned to its core functions but must adapt to an increasingly volatile global economy. “Some have described our rate hike earlier this month as an ‘insurance hike.’ I’m sorry to disappoint them, but that is not an accurate description,” Lagarde explained. “Without that intervention, inflation would have remained above the 2% target in both 2027 and 2028. It was a decision based on the evidence before us, taken with confidence thanks to the investments we’ve made in our models and data.”
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