European Central Bank's president Christine Lagarde said on Monday that the ECB might have to take further measures if inflation is not at a target when rates are at neutral. She noted that the Bank wants to reach neutral and will decide then if more action is needed.
Lagarde also said that risks to inflation are primarily on the upside in the eurozone, noting that the weak euro has added to the build-up of inflationary pressures. She said that activity is expected to slow substantially in the coming quarters. Nonetheless, the ECB's president confirmed the policymakers expect to raise interest rates further over the next several meetings to dampen demand and guard against the risk of a persistent upward shift in inflation expectations.