Ella 
ECB President Christine Lagarde spoke at the International Monetary Fund’s annual meeting in Marrakech, Morocco, this past weekend. Lagarde said underlying inflation in the eurozone remains strong and wage growth is at “historically high levels.
The labor market still shows no real signs of weakness.
Downside risks include weakening demand due to stronger monetary policy transmission or a deterioration in the international economic environment.
If monetary policy is more effective than expected, or if the global economy weakens further and geopolitical risks intensify, economic growth could slow.
Economic growth could also be higher than expected if a strong labor market, higher real incomes and less uncertainty boost consumer and business confidence and encourage them to spend more.
This is not a hawkish or dovish issue, but it does require us to be patient at this point as supply shocks unwind and new shocks emerge, while being careful to maintain the anchor as long as inflation remains too high to drive inflation expectations.
ECB President Christine Lagarde’s comments had little impact on the euro. At press time, the EUR/USD was trading at 1.0518, steadily higher, up 0.07% on the day.
