Home Business Lagarde’s ECB forced to bring rates into restrictive territory? Here’s what it will depend on

Lagarde’s ECB forced to bring rates into restrictive territory? Here’s what it will depend on

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Christine Lagarde’s ECB could be forced to bring Eurozone rates “into restrictive territory”. This is what Reuters reports, based on what has been learned from five anonymous sources.

The rumors come after last Thursday, 8 September, the European central bank raised interest rates in the euro area by 75 basis points, launching the most massive monetary squeeze since the birth of the euro, and suggesting that it is oriented to raise rates further until inflation drops to 2%, a target set by the Eurotower.

The sources interviewed by Reuters explained that the probability that the central bank takes rates into restrictive territory will increase if the first projection that the ECB will draw up for inflation in 2025 implies a figure even higher than the 2% target.

In pursuit of the fight against inflation, which in the euro area jumped to an annual rate of 9.1% in August, Christine Lagarde’s ECB decided to raise all three reference interest rates by 75 basis points. ECB.

Therefore, the interest rates on the main refinancing operations, the marginal lending facility and the deposits with the central bank were raised to 1.25%, 1.50% and 0.75% respectively, with an effect from 14 September 2022.

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