ECB’s Lagarde says ‘stay the course’ is her policy mantra

Bloomberg

European Central Bank (ECB) President Christine Lagarde said policymakers mustn’t let up in their battle with inflation — even as the spike in prices appears to have peaked.
“We have to also stay that course of resilience that we observed in 2022,” Lagarde told a panel on Friday at Davos. “‘Stay the course’ is my mantra for monetary-policy purposes.”
Lagarde and some of her ECB colleagues have been pushing back against suggestions that the pace of interest-rate hikes should be slowed after an expected half-point move next month. While headline inflation has dipped back into single digits, underlying price gains reached a record
in December. The economy, meanwhile, is proving robust — despite rising rates.
Lagarde warned that excessive and untargeted government spending to shield households and businesses from the energy crisis could prompt further ECB action if it stokes inflation.
“I hope that in 2023 fiscal policy will not work in a counter-cyclical way to the monetary policy,” she said.
“We don’t need to be pushed to do more than is necessary.”