Central Banks
Lagarde Says Rates to Rise More, May Need to Become Restrictive
- ECB president says risk of euro-area recession has increased
- Appetite for anothjer jumbo rate hike next month may be waning
This article is for subscribers only.
European Central Bank President Christine Lagarde said interest rates may need to be lifted to levels that restrict economic expansion in order to drive down inflation that’s rocketed to more than five times the official target.
Lagarde said Friday that the “risk of a recession” has increased, but that a downturn on its own won’t be sufficient to tame soaring prices. Having already delivered the most aggressive monetary tightening in its history, the ECB is expected to raise borrowing costs to 2% or more next month from 1.5% now.