ECB Forum on Central Banking - Monday 1 July

First of all, I would like to welcome you all to this year’s ECB Forum. The theme of the conference is “Monetary policy in an era of transformation”, and we have a rich programme ahead of us, exploring the changes that are taking place. But even if most of us can agree that the economy is undergoing substantial change, I imagine there are more diverging views about where it will end up. This lack of clarity presents a profound challenge for policymakers, as we must try at once to understand these transformations and to steer the economy through them. Indeed, much of the policy challenge over the last few years has involved stabilising inflation while facing fundamental uncertainty about the economy. Nevertheless, we have managed to chart a path through this uncertainty, and we have come a long way in the fight against inflation. In October 2022, inflation peaked at 10.6%. By September 2023, the last time we raised rates, it had fallen by more than half, to 5.2%. And then after nine months of holding rates steady, we saw inflation halve again to 2.6%, which led us to cut rates for the first time in June. Our work is not done, and we need to remain vigilant. But this progress allows us to look back and reflect on the path we have taken. This evening I would like to talk about three specific features that have defined this policy cycle: the risks, the path and the cos post: ECB NOT IN A HURRY TO CUT RATES FURTHER, LAGARDE SAYS post: ECB’S LAGARDE: IT WILL TAKE TIME TO BE CERTAIN THAT INFLATION’S ON TRACK ECB’S LAGARDE: STRONG LABOUR MKT MEANS WE HAVE TIME TO GATHER INFORMATION ECB’S LAGARDE: SOFT LANDING FOR EURO ZONE ECONOMY NOT GUARANTEED post: MORE ECB'S LAGARDE: REITERATES THAT THE GOVERNING COUNCIL REMAINS DATA DEPENDENT AND WILL 'TAKE OUR POLICY DECISIONS MEETING BY MEETING' #ecb #europeancentralbank #monetarypolicy #christinelagarde