Lane's Remarks on Inflation and Rate Hikes
Lane stated in a speech in Dublin that the current information on underlying inflation pressures suggests raising rates further beyond the March meeting will be appropriate. He added that the exact calibration beyond March should reflect the information in the upcoming macroeconomic projections, the incoming data on inflation, and the operation of the monetary transmission mechanism.
Impact of Cumulative Tightening
Lane highlighted that the impact of the cumulative tightening in the monetary policy stance that has already occurred must be considered as part of the ECB's meeting-by-meeting approach. He also emphasized that the ECB shouldn't be on "autopilot."
March 16 Interest-Rate Hike
The ECB chief economist spoke ahead of a March 16 decision which is all but certain to result in another half-point interest-rate hike. Officials have already raised the deposit rate by 300 basis points to 2.5%, and markets are now betting it will peak at 4%.
Focus on Underlying Inflation
The speech focused on underlying inflation. Last week, the core gauge of consumer price growth, excluding volatile items such as food and energy, surged to a new record of 5.6%.
