(MT Newswires) -- Christine Lagarde, President of the European Central Bank, has announced that new economic projections will be available by June. These projections will make it possible to check the validity of the March inflation forecasts and provide a more accurate picture of underlying inflation.
It stresses the importance of understanding the dynamics of the economic recovery and the labour market, which will influence wages, profits and productivity. The ECB will also have more time to judge whether the inflation data matches their expectations. If this is the case, it will boost confidence in the ECB's models.
Lagarde says that if the data confirms alignment with core inflation expectations and the transmission of monetary policy is effective, the ECB will consider easing policy. However, it expects services inflation to remain high for most of the year.
She highlights two key implications for the future of monetary policy. First, decisions will remain data-driven and will be taken at each meeting. The ECB cannot commit to a fixed interest rate path. Secondly, the ECB's policy framework remains essential for interpreting the data and adjusting monetary policy, with a regular reassessment of the criteria used.
In conclusion, Lagarde said that the ECB would have a better understanding of the data relevant to its policy in April and even more so in June. She hoped that her explanations would make it easier to grasp the ECB's analysis, logic and methodology. With the data to come, the ECB will be able to assess its confidence in the economic trajectory and adjust its policy accordingly.
