The European Central Bank does not base its policy rate decisions solely on swings in oil and gas prices, ECB President Christine Lagarde said, cooling investors’ enthusiasm after they had already priced in three to four interest rate hikes on the back of the commodity rally.
At a press conference, Lagarde reminded markets of basic macroeconomics: expensive energy not only lifts inflation but also weighs on economic growth by depressing consumer demand. The ECB must judge the whole picture, she said, so a knee‑jerk reaction to commodity moves should not be expected. Overall, Lagarde described the current economic horizon as an era of profound uncertainty.
While classical economics remains shrouded in fog, the ECB is pressing ahead on the future of money. Lagarde said she expects legislation on a digital euro to be adopted as early as this year. If policymakers deliver, a pilot for a European digital currency would be launched in mid‑2027.