From today through Wednesday, Sintra is hosting central bank governors, academics, policymakers and financial market specialists, as part of the ECB Forum, to discuss inflation in an environment of volatility.
The European Central Bank (ECB) event comes at a time when inflation continues to capture the attention of decision makers, after dominating the debate last year.
Later in the afternoon, ECB President Christine Lagarde will kick off work with a welcome dinner, at which the Deputy Director General of the International Monetary Fund (IMF), Gita Gopinath, will address.
The debate sessions only start on Tuesday morning with a speech by Christine Lagarde, who announced a rate hike of 25 basis points after the last meeting of the Governing Council last week.
As of 21 June, the MRO rate has increased to 4%, the deposit facility rate to 3.50% and the marginal lending facility rate to 4.25%.
Christine Lagarde admitted that another rate hike was very likely at the institution’s next meeting in July, while the governor of the Bank of Portugal (BdP) said a day later that he hoped there could be more predictability about the rate after the summer path of rates ECB interest rates as new data on inflation will have been received.
The ECB’s choice differed from the decision of the US Federal Reserve (Fed), which at its last meeting opted to maintain the benchmark interest rate range.
However, Fed Chair Jerome Powell admitted last week that rates will continue to be hiked in the coming months, depending on economic data.
On June 16, the Bank of Japan (BOJ) decided to leave intact its monetary easing strategy, which includes ultra-low interest rates, pending more positive signs of economic growth and inflation deceleration.
For example, he maintained negative benchmark interest rates and the target for 10-year government bond yields around 0%, noting that the Japanese economy has grown in recent quarters, “despite the impact of factors such as past high energy prices”, given the fact that financial conditions have “improved”.
For its part, the Bank of England (BoE) announced its 13th consecutive rate hike last Thursday, this time by 50 basis points, from 4.5 to 5%, the highest level since 2008, after inflation in the United Kingdom exceeded forecasts by analysts (8.7% in May).
The event runs through Wednesday, the day when central bankers from the ECB, Fed, BOJ and BoE meet to discuss monetary policy.
Source: DN
