Lagarde speech: Have to raise rates to levels that will deliver our 2% inflation target

European Central Bank (ECB) President Christine Lagarde reiterated on Friday that they will not let high inflation become entrenched, as reported by Reuters.

Additional takeaways

"Rate path ahead will look different depending on the contingencies we face."

"We have to raise rates to levels that will deliver our 2% medium-term inflation target."

"If we were to see, for example, inflation becoming more persistent and expectations being at risk of de-anchoring, we would need to take additional actions."

"We are seeing a faster and stronger pass-through of these shocks into prices."

"Historical evidence suggests that we should not expect slowing growth to make a significant dent in inflation."

"We are likely to see wages catching up to some extent with higher inflation."

Market reaction

EURUSD edged higher following these comments and was last seen rising 0.4% on the day at 0.9790.