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The EURUSD is trading at 1.1379 at the start of the press conference.
Lagarde’s prepared comments:
- Recent data points to some improvement in economic activity.
- Activity and services partly recovered.
- Digital services robust, partly on AI.
- Firms, households expected labor market to remain weaker than before conflict.
- Indicators suggest economic activity remain modest
- Will said monetary policy to ensure inflation returns to target in medium-term.
- Inflation outlook and risks will be key to setting rates.
- Hello for energy prices while volatile are close to June projections, but uncertainty remains high
- Inflation declined to 2.8% in June
- Energy shock feeding into higher prices.
- Underlying inflation contained, full effect of energy shock has yet to play out
- Wage expectations continue to indicate moderate wage growth.
- Most measures of long-term inflation expectations stand around 2%.
- Energy inflation likely to keep inflation well above target into first half of 2027, but expect inflation will then decline as energy prices are expected to fall.
- Conflict remains a major source of uncertainty.
- Risks to growth tilted to the downside.
- Recent weeks have brought renewed setbacks.
- Energy prices could go up further and for longer than expectations.
- Higher energy prices will weigh on real incomes.
- Other geopolitical issues remain including Russia’s conflict with Ukraine threatened growth
- Risks to inflation are to the upside.
- Energy shocks could intensify, potentially increasing broader inflationary moves and secondary effects.
- Extreme weather events, climate crisis could drive up food prices by more than expected.
- In contrast inflation can turn lower if the conflict is solved sustainably
- Overall financial conditions have become slightly tighter since the last meeting
Q&A
- Have had some relatively benign developments since June decision
This article was written by Greg Michalowski at investinglive.com.
