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☆ ECB's Lagarde warns some fiscal policies in Europe could fuel excess demand
▼ + stars: | 2022-12-02 | by ( ) www.reuters.com time to read: +2 min

BANGKOK, Dec 2 (Reuters) - European Central Bank President Christine Lagarde warned on Friday that some European governments' fiscal policies could lead to excess demand, and that fiscal and monetary policies need to work in synch for sustainable, balanced economic growth. "Fiscal policies that create excess demand in a supply constrained economy might force monetary policy to tighten more than would otherwise be necessary," Lagarde said at a conference hosted by the Bank of Thailand and Bank for International Settlements in Bangkok. "We need higher investment and structural reforms to remove the supply constraints and ensure that potential output is not impaired by the changing global economy. "And in a world where external demand is more uncertain, we will also need to strengthen the domestic supply and demand through higher productivity growth," she said. Its rate on bank deposits was increased by 200 basis points to 1.5% in three months.

☆ ECB's Lagarde says we haven't reached inflation peak
▼ + stars: | 2022-11-28 | by ( ) www.reuters.com time to read: 1 min

FRANKFURT, Nov 28 (Reuters) - Euro zone inflation has not peaked and the risk is that it will turn out even higher than currently expected, European Central Bank President Christine Lagarde said on Monday. "We do not see the components or the direction that would lead me to believe that we've reached peak inflation and that it's going to decline in short order," Lagarde told the European Parliament. "Whenever I ask my top-notch economists at the ECB ... about the risk, the answer that I get at the moment is (that) risk is to the upside, without qualifying the upside." Reporting By Francesco CanepaOur Standards: The Thomson Reuters Trust Principles.

Nov 28 (Reuters) - A look at the day ahead in Asian markets from Jamie McGeever. Thousands of people are taking to the streets in several cities across the country in an unprecedented protest against the government's stringent COVID restrictions after a deadly apartment fire in Urumqi in the country's far west. The wave of civil disobedience and clashes between protestors and police come amid mounting frustration over President Xi Jinping's signature zero-COVID policy. It's safe to say that this does not happen very often, and the world is watching intently to see how Beijing handles the brewing crisis. From an immediate market perspective, the COVID surge and nationwide unrest snuff out any hope China is about to re-open its economy.

☆ ECB's Lagarde sticks to rate hikes as bond debate starts
▼ + stars: | 2022-10-12 | by ( ) www.reuters.com time to read: +2 min

WASHINGTON, Oct 12 (Reuters) - European Central Bank President Christine Lagarde on Wednesday singled out interest rate increases as the best tool to fight runaway inflation in the euro zone even as a debate about mopping up excess cash got underway. Trying to fight runaway prices, the ECB has raised its rate on bank deposits to 0.75%, promised more hikes and begun a debate about whittling down its 3.3-trillion-euro ($3.20 trillion) bond holdings - legacy of its fight against deflation in the last decade. Lagarde emphasized rate hikes as the ECB instrument of choice at present even as other policymakers began publicly debating how and when to stop reinvesting some of the proceeds from the debt the central bank had bought since 2015. Also speaking in Washington, Dutch central bank chief Klaas Knot said the ECB needed at least two more rate hikes of up to 75 basis points each before reaching the neutral level, where it neither stimulates nor curbs the economy. Lagarde acknowledged the discussion about this so-called "quantitative tightening" had started and would continue.

☆ Asked about Italy, ECB's Lagarde says she won't fix 'policy errors'
▼ + stars: | 2022-09-26 | by ( ) www.reuters.com time to read: +2 min

FRANKFURT, Sept 26 (Reuters) - The European Central Bank won't use its latest emergency scheme to buy the bonds of countries that make "policy errors", its President Christine Lagarde said on Monday in response to a question about Italy's likely next government. A right-wing alliance led by Giorgia Meloni triumphed in Italy's general elections on Sunday, inheriting one of the euro zone's heaviest debt burdens at a time of rising borrowing costs and looming recession. "It's (used in) a situation where ... there are disorderly market dynamics that are not justified by fundamentals or by economic policy errors that will have been made," Lagarde said. "This limits the risk of fuelling inflationary pressures, thereby also facilitating the task of monetary policy." Lagarde also repeated the ECB's most recent message that interest rates will need to rise over the next several policy meetings even as growth slows substantially.

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