The European Central Bank pushed back on Thursday against market bets that it would slow the pace of its interest rate hikes given recent falls in inflation and easing pressure to keep up with policy moves by other central banks.
“I would invite them to revise their positions,” Lagarde said during a panel conversation in Davos, Switzerland. “I think they would be well advised doing so.” Dutch central bank chief Knot, a policy hawk, said recent market moves were not “compatible with a timely return of inflation towards 2 per cent” and that the ECB would continue raising“Most of the ground that we have to cover, we will cover at a constant pace of multiple 50-basis-points hikes,” Knot told CNBC.
U.S. inflation has also been in a downtrend, leading some Fed policy-makers to open the door to smaller rate hikes of just 25 basis points apiece.