European Central Bank (ECB) President Christine Lagarde said on Thursday in the Q&A section of her post-ECB meeting press conference that the ECB needs to ensure that fragmentation doesn't prevent the transmission of its monetary policy, reported Reuters. If necessary, the ECB can deploy new instruments to tackle fragmentation, she added.
On a separate note, Lagarde warned that when the ECB revisits its inflation forecasts in September, if the ECB staff see 2024 inflation coming in at 2.1% or higher, then a larger than 25 bps rate hike is likely at that meeting. Meanwhile, Lagarde noted that the ECB deliberately didn't discuss the neutral rate of interest on Thursday.
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