European Central Bank President Christine Lagarde said yesterday (Wednesday): “The recent tensions surrounding the banking sector pose new risks to the economy, at a time when the bank still has a way to go to combat high inflation.”
And she stressed, during her participation in the Frankfurt Forum, that the financial turmoil associated with the recent failures of many banks, created “new downside risks” for the economy.
She added that the institution's scenario of reducing inflation to about 2% in 2025, if confirmed, shows that there is "a way that must be taken to contain inflationary pressures."
Lagarde's comments come ahead of the upcoming Federal Reserve meeting and monetary policy in light of the troubled banks' crisis and the intervention to protect the sector from wider repercussions.
The markets are focusing on how the Fed will assess the repercussions of the banking crisis, and therefore its upcoming policy to raise interest rates to protect the economy and continue to control inflation.
Okaz (Frankfurt) @okaz_online
