Lagarde speech: Incoming data don’t point to a material risk of stagflation

European Central Bank President Christine Lagarde downplayed stagflation risks in the euro area while speaking in an interview with Phileleftheros published by the ECB on its website.

Key quotes

"Incoming data don’t point to a material risk of stagflation.”

“Growth in the euro area could be as low as 2.3% in a severe scenario due to the war in 2022.”

“In all scenarios inflation is expected to decrease and settle at levels around the bank's 2% target in 2024.”

Market reaction

EUR/USD is testing lows near 1.0950 amid notable US dollar demand. The spot is down 0.27% on the day.