Lagarde Stresses Moderate ECB Policy Response Amid Rising Inflation

European Central Bank (ECB) President Christine Lagarde stated that moderate ECB policy responses are still suitable given current inflation levels. The euro zone's inflation has exceeded 3% and may reach 4% by year-end, double the ECB's target.

Lagarde pointed out that high oil and gas prices due to the US-Iran conflict are primarily driving rising prices. She noted that there are no signs of second-round effects across the euro zone.

Economists consider the first two rate hikes as a guide for what constitutes a 'measured response.' Many economists expect the ECB to implement a rate increase in December, skipping its October 29 meeting.