ECB Press Conference: Rate Hike and Inflation Outlook (with Matt Miller)

3/25/2026 12:54:23 PM	short term up	5 days later	+7.30%	+7.30%

12/8/2025 2:37:40 PM	medium term up	20 days later	-1.67%	-1.67%

Christine Lagarde

The Governing Council decided unanimously to raise three key ECB interest rates by 25 basis points, with no discussion of alternatives. The decision is based on the Eurosystem staff projections and is robust across adverse, severe, and milder scenarios.

The decision is not an 'insurance' or preemptive move, but a necessary monetary policy decision given the inflation outlook above target until late 2027.

Christine Lagarde

We are beginning to see a broadening of inflation throughout the economy via direct and indirect effects of the energy shock, but we are not yet seeing second-round effects through wages.

Services inflation rose from 3% to 3.5%, but it's too early to attribute this solely to second-round effects. Wage projections of 3.2% are included in the baseline.

Christine Lagarde

The neutral rate was not discussed by the Governing Council. The decision is based on the inflation outlook, risks to the upside, and the robustness of the decision across all scenarios.

Growth forecast was revised to 0.8% for this year, -0.1% vs March, but the economy is not under significant threat.

Christine Lagarde

The main risk would be not to take this decision. If inflation runs out of control, it becomes much more difficult to bring it back to target.

The decision is a signal that is necessary given the economic situation and uncertainty.

Christine Lagarde

Longer-term inflation expectations remain broadly anchored around 2%, though short-term expectations have risen, particularly among consumers.

The ECB monitors market-based, survey-based, and consumer expectations across various intervals.

Christine Lagarde

The ECB and national central banks are well-equipped to resist potential AI-related intrusions and hacking, and are calling attention to banks under SSM supervision to protect themselves.

AI developments are here to stay and require both internal central bank defenses and broader government-level frameworks.

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