ECB’s Lagarde: In a position to exit negative rates by end of Q3

“We are likely to be in a position to exit negative rates by the end of Q3,” European Central Banks (ECB) President Christine Lagarde said on Monday.

Further comments

I expect APP to end very early in Q3.

This would allow a rate hike to take place in July, in line with forward guidance.

If inflation stabilises around 2% in medium-term, a progressive further normalisation towards neutral rate will be appropriate.

But the pace and overall scale of the adjustment cannot be determined ex ante.

Situation currently faced is complicated by presence of negative supply shocks.

There are arguments for for gradualism, optionality and flexibility when adjusting monetary policy.

We have one important guidepost for policy, that is to deliver 2% inflation over medium-term.

ECB will take whatever steps are needed to do so.