European Central Bank President Christine Lagarde indicated that inflation in the Eurozone has not yet peaked and may rise more than currently expected, hinting at a series of interest rate increases in the future. Lagarde stated during a session of the European Parliament, “We do not see the trend that would lead me to believe that we have reached the peak of inflation and that it will decrease soon.” She noted that economists at the European Central Bank still see clear "upside" risks, referring to the possibility that inflation readings may come in higher than expected.
She indicated a belief in a trend toward increasing interest rates, saying, “It is clear that we need to continue raising interest rates... And although I do not want to talk too much about the future, I believe we will head towards (increasing interest rates).” Lagarde kept her options open regarding the extent and number of future rate increases, stating that it would depend on various factors. She added, “The extent to which we need to go and the pace of that will depend on developments in our outlook, the persistence of shocks, wage reactions, inflation expectations, and our assessments of shifts in our (monetary) policy stance.”
