Christine Lagarde: Interview with Yomiuri Shimbun
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Interview of Christine Lagarde with Yomiuri Shimbun (4 November). She puts October headline inflation at 4%, driven by energy (20.8%), with core inflation stable at 2.5% and services at 3.3%. She warns that inflation will remain high in the coming quarters and that, based on current information, a significant change would be needed for the direction not to be the one she expects for December.
Key points
- October headline inflation 4%; energy 20.8% (18.9% in September); core 2.5%; services 3.3%
- No signs of second-round effects beyond those already incorporated in the projections; they are monitoring multi-year wage agreements and firms' wage expectations
- The December projections will reflect higher energy futures curves and higher long-term rates; she does not anticipate the figure
- Data-dependent, meeting-by-meeting decisions, but 'a significant change would be needed' to alter the direction she expects
- On France and the rise in long-term yields: she calls on Member States to comply with fiscal rules; no instrument is ruled out (question on the TPI)
- Risk of AI-enhanced cyberattacks; cooperation with other central banks, including the BoJ
- She talks about her early departure (announced on 29 October, effective 7 February 2027) and the low presence of women on the Governing Council
Who is affected
Euro rates and fixed income markets; expectations for the December meeting
Deadlines
Next monetary policy meeting and projections: December 2026. Lagarde's departure: 7 February 2027
Plain-language version
Christine Lagarde, president of the ECB (the euro area's central bank, which sets interest rates), says inflation, the general rise in prices, hit 4% in October, driven by energy, up 20.8%. She expects it to stay high in the coming quarters and says it would take a significant change to alter the direction she expects in December, a decision that affects mortgages and loans.
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