Lagarde Signals July Rate Hike, 'Weeks' After QE Ends

The transcript discusses the importance of gradualism and flexibility in monetary policy, highlighting the Governing Council's April decisions. It outlines the sequence for normalization, starting with ending net purchases under the asset purchase program, expected to conclude early in the third quarter. The first rate hike will follow, informed by ECB guidance, with timing deliberately left flexible. The process will be gradual, emphasizing normalization rather than tightening.

What are the two key principles emphasized for monetary policy adjustment?

• Gradualism and flexibility

• Aggressiveness and stability

• Speed and rigidity

• Consistency and predictability

What is the first step in the normalization process according to the Governing Council's decisions?

• End of net asset purchases

• Increase in interest rates

• Introduction of new monetary tools

• Reduction in inflation targets

When is the first rate hike expected to occur?

• Sometime after ending net asset purchases

• Immediately after ending net asset purchases

• Before ending net asset purchases

• Simultaneously with ending net asset purchases

What term is deliberately used instead of 'tightening' to describe the process?

• Contraction

• Normalization

• Stabilizing

• Loosening

How long could the period be between ending net asset purchases and the first rate hike?

• Several months

• A few weeks

• A few days

• Several years