ECB’s Lagarde: Inflation too high, rates to rise further

European Central Bank President Christine Lagarde repeated that the cycle of interest-rate hikes has to ensure that inflation returns to the 2% target over the medium term.

Meanwhile, the EUR/USD pair is on the up and traders have been of the mind that the US economy is slowing enough to allow the Federal Reserve to ease its rate-hiking pace.

”Must bring inflation back to 2%,” she said in recent trade, adding again that inflation is ‘much too high’’. She said rates will rise more.

This ECB stance weighs on the US dollar and the ongoing speculation that China could ease COVID restrictions is also playing a role in the downside at the start of the week.

EURUSD has been approaching last month’s highs. “What we have to do at the moment is difficult,” Lagarde noted, in an interview broadcast Monday night. “We have to bring inflation back to 2% in the medium term.. that is our objective, that’s our primary concern, that’s our compass”.