Lagarde says no sign of second round inflation effects
Euro-area households raised their inflation expectations for the year ahead to 3.0%, according to the ECB's monthly survey.
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European Central Bank President Christine Lagarde said there are no signs of second round effects so far, in comments to RTE Radio.
Her assessment sits against a shift in household sentiment. Euro-area households raised their one-year inflation view to 3.0% and their three-year view to 2.9%, both up from July, according to the ECB's monthly survey.
Other ECB officials have struck a more cautious tone in recent weeks. Olli Rehn said the inflation picture has shifted since the bank's comfort zone. Gabriel Makhlouf said every meeting is live and that inflation risks skew higher. Pereira said risks have risen considerably in the past few months since the bank's last rate move.
The euro fell to $1.1474 on Wednesday, as the dollar firmed after the Federal Reserve's rate decision.
Lagarde's confirmation that second round wage and price effects remain absent supports the case for measured rate increases rather than aggressive tightening, in line with the ECB's recent stance. It reinforces a dovish reading of recent policy and suggests less urgency behind the rate increases traders are pricing in for late 2026 and 2027, though it does not resolve the uncertainty around energy shocks that several officials have flagged as the main risk.