European Central Bank President Christine Lagarde said on Friday that the bank's current Asset Purchase Programme (which is set to taper from EUR 40B in purchases this month to EUR 20B in June) is likely to end in early Q3, reported Reuters. Moreover, there is a strong chance that interest rates will be raised this year, she added. Lagarde added that she is not seeing stagflation.
Her remarks struck a slightly more hawkish tone than those given on Thursday, when she was keen to emphasise the need to maintain optionality, gradualism and flexibility in the conduct of monetary policy.
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