Lagarde speech preview: All about the ECB press conference

• Christine Lagarde will offer an important press conference on Thursday.
• The European Central Bank is expected to raise interest rates by 25 basis points, but a 50 basis point hike is not ruled out.
• The question and answer section of the speech will be important in determining the ECB’s dovish or aggressive stance.

Christine Lagarde, President of the European Central Bank (ECB), will hold a press conference on Thursday, May 4 at 12:45 GMT, 30 minutes after the release of the statement on the central bank’s monetary policy decision. The ECB is expected to raise interest rates by 25 basis points, but the possibility of a 50 basis point hike is not ruled out.

You can follow the ECB press conference, with Christine Lagarde’s speech, in the following video:

Christine Lagarde’s question and answer session will be key to shaping the reaction of the markets. The expected 25 basis point rate hike could be accompanied by dovish comments from the ECB president, while a surprising 50 basis point hike could be accompanied by dovish comments from Lagarde. Matias Salorda senior analyst at FXStreet, details both scenarios:

There could be 25 basis points higher on hawkish comments or 50 basis points higher on dovish stance. The decision for a further rate hike will likely be unanimous, but policy makers will likely differ on the magnitude. (…) A 50 basis point rise should strongly boost the Euro overall, while a 25 basis point rise could have a mixed impact, depending on what the statement says. The net result will depend on the magnitude of the hike and also on what the ECB sees in the future. The ECB is most likely to be cautious and explicit forward guidance, which should keep the Euro support in the short term. A more cautious approach, by contrast, could weaken the common currency.

The ECB has been raising interest rates in recent months, starting in the summer of 2022, raising the rate on main operations from 0% to the current 3.5%. At the previous press conference, in March, Lagarde conspicuously sported an owl pin on his jacket, a metaphor for distancing herself from hardliners and moderates alike.

The way in which Lagarde and her colleagues on the Economic Policy Council act this time will be crucial for the reaction of the markets, especially for the euro.

About Christine Lagarde

Christine Lagarde was born in 1956 in Paris, France. She graduated from Paris West Nanterre La Défense University and became President of the European Central Bank on November 1, 2019. Previously, she was President and Managing Director of the International Monetary Fund between 2011 and 2019. Lagarde previously held various senior ministerial positions at the Government of France: she was Minister of Economy, Finance and Industry (2007-2011), Minister of Agriculture and Fisheries (2007) and Minister of Commerce (2005-2007).