Lagarde to Present Results of ECB Strategy Review on Thursday


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European Central Bank President Christine Lagarde will present the results of the institution’s strategy review on Thursday, when she’s likely to announce the first change to the inflation goal in almost two decades.

The ECB said the results of the review will be announced at 1 p.m. Frankfurt time on Thursday, and Lagarde’s briefing will be 90 minutes later. Policy makers hammered out a consensus in a special meeting in Frankfurt that concluded on Wednesday.

The wide-ranging review kicked off in January last year, though it was quickly derailed by the pandemic. Talks resumed last September.

The inflation goal -- currently “below, but close to, 2%” -- is the biggest focus. The ECB has fallen short for most of the past decade, damping confidence in its ability to deliver price stability. Another issue high on the agenda is finding a way to contribute to fighting climate change.

Signs that a decision was imminent started to emerge after policy makers met for a retreat close to Frankfurt last month. The ECB had previously signaled that it would announce results in September.

One of the final roadblocks was how much flexibility policy makers should grant themselves to tolerate faster inflation after periods of undershooting. Some officials were in favor of a precise goal of 2% with flexibility around it, while others preferred a policy closer to the Federal Reserve’s average inflation targeting.

A key tussle in the climate-change talks was over whether the ECB should stick to its principle of mirroring the composition of the market when buying bonds -- known as “market neutrality.” That was resolved when Bundesbank President Jens Weidmann signaled last month that he could support tilting purchases toward greener assets if it means protecting the balance sheet from climate and transition risks.

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