ECB’s Lagarde signals no major policy shift at next month’s meeting

Bloomberg

European Central Bank (ECB) President Christine Lagarde played down the possibility of a major change away from the current stimulus settings when policy makers meet next month.
“It’s far too early and it’s actually unnecessary to debate longer-term issues,” Lagarde said at a news conference in Lisbon, responding to a question on whether Europe’s economic rebound may lead the ECB to taper its emergency bond-buying program.
“Our commitment to the euro area is to maintain favourable financing conditions throughout the whole pandemic period,” she said.
A pick up in vaccination efforts and a drop in infections have fuelled speculation that the ECB could soon start discussing scaling back support. The central bank stepped up its bond purchases this quarter to counter rising borrowing costs driven by the faster US recovery.
The ECB’s Governing Council will meet on June 10 to review updated forecasts for euro area. The euro falls against all of
its group-of-10 peers after
Lagarde’s comments.
Lagarde also reiterated her view that higher inflation figures in 2021 would be temporary. Policy makers should see through the acceleration in price gains because underlying factors for sustained growth “are
certainly not there,” she said.