European Central Bank (ECB) President Christine Lagarde spoke over the weekend at the International Monetary Fund’s annual meetings in Marrakech, Morocco. Lagarde stated that underlying inflation in the eurozone is still strong and wage growth is “historically high”.

Key quotes

“Labor market still shows no real sign of weakening"

“Downside risks include weaker demand, due for example to a stronger transmission of monetary policy or to a worsening of the international economic environment,”

“Growth could be slower if the effects of monetary policy turn out to be more forceful than expected, or if the world economy weakens further and geopolitical risks intensify,”

“Growth could also be higher than projected if the strong labor market, rising real incomes, and receding uncertainty boost confidence among consumers and businesses and lead them to spend more."

“It’s not a question of being hawkish or dovish, but it requires us at this point in time to be patient, as supply shocks reverse and new shocks arrive, and be attentive to ensure that inflation expectations remain anchored when inflation is still too high