ECB Raises Key Rates Amid Supply Shock, Future Moves Uncertain

Christine Lagarde, President of the European Central Bank (ECB), recently spoke about the ECB's decision to raise key rates by 25 basis points at the September policy meeting. When asked about the next move, she stated that 'Can't anticipate what will be the next move.' The ECB focused on today's decision and did not debate the future rate path.

The interest rate hike is a response to the current supply shock, according to Lagarde. She emphasized that markets do what they have to do, but the ECB is not taking a view on which direction to go at the next meeting. The neutral rate band is still a work in progress and highly conceptual, she added.

Lagarde downplayed the importance of the neutral rate, calling it 'not attaching great importance' to it. When asked if the decision was a no-brainer, she replied affirmatively, stating that it was indeed a straightforward choice.