Lagarde: ECB Must Keep Rates High Until Inflation Is Fully Contained

Lagarde Says ECB Rates to Stay High Until Inflation Is Fully Squeezed Out

European Central Bank (ECB) President Christine Lagarde delivered a clear message over the weekend: the fight against inflation is not over. In a speech addressing the current economic landscape, Lagarde emphasized that the ECB will maintain a tight monetary policy stance for as long as necessary to achieve lasting price stability.

Inflation Still Embedded in the Economy

Lagarde stated that despite recent progress, inflation remains too persistent across several segments of the Eurozone economy, requiring a firm and sustained policy response.

“There’s still a long way to go until inflation is squeezed out of the economy,” Lagarde warned, signaling that rate cuts are not on the near-term horizon.

ECB’s Strategy: Hold Rates Higher for Longer

The remarks confirm the ECB's ongoing commitment to a higher-for-longer interest rate strategy. While some investors had hoped for signs of easing later in 2025, Lagarde’s comments point to continued restraint, aligning with the ECB's inflation-fighting mandate.

Eurozone Growth vs Inflation Control

Lagarde’s comments arrive amid a backdrop of slowing growth in parts of the Eurozone, raising concerns about the trade-off between inflation control and economic momentum. However, the ECB chief made it clear that ensuring long-term price stability remains the top priority.

Related Content on Tredu.com:

• Will the ECB Cut Rates in 2025? Lagarde’s Comments Explained
• How Sticky Inflation Is Driving ECB Policy
• What Higher-for-Longer Means for European Borrowers

Key Takeaways:

• ECB President Christine Lagarde says inflation is still not fully under control.
• Interest rates will stay high for as long as needed to secure price stability.
• The ECB signals no near-term rate cuts, reinforcing its tightening bias.
• Lagarde’s stance underscores a “higher-for-longer” monetary policy framework.
• Implications could include slower growth but long-term inflation containment.