Christine Lagarde: Back to basics in an uncertain environment

Back to basics in an uncertain environment Skip to: Skip to navigation Skip to content Skip to footer EN Български Čeština Dansk Deutsch Eλληνικά English Español Eesti keel Suomi Français Gaeilge Hrvatski Magyar Italiano Lietuvių Latviešu Malti Nederlands Polski Português Română Slovenčina Slovenščina Svenska Menu Monetary policy & markets Monetary policy & markets Our monetary policy strategy, the tools we use and the impact they have Overview of monetary policy and markets Quick links What is monetary policy? Strategy review Asset purchase programmes Latest monetary policy press conference 11 June 2026 Introduction Benefits of price stability Scope of monetary policy Transmission mechanism Decisions, statements & accounts Monetary policy strategy Strategy review Medium-term orientation Two per cent inflation target Economic, monetary and financial analysis Economic analysis Monetary and financial analysis Monetary policy operations Open market operations TLTROs Asset purchase programmes Securities lending Pandemic emergency purchase programme Standing facilities Minimum reserves Two-tier system International market operations Euro central bank liquidity lines Emergency liquidity assistance (ELA) Liquidity analysis Collateral Eligibility criteria and assessment Marketable assets Non-marketable assets List of eligible marketable assets User guide Collateral management Eligible SSSs Eligible links Eligible triparty agents Risk mitigation ECAF Risk control Haircut categories Valuation Loan-level requirements Contacts Structure of the euro area economy Economic policy Fiscal policies External trade Effective exchange rates Financial structure Financial markets Financial intermediaries Economic diversity Labour market Market contact groups Bond market (BMCG) Money market (MMCG) Debt Issuance Market Contact Group (DIMCG) ECB Operations managers group (ECB OMG) Foreign exchange (FXCG) Institutional Investor Dialogue (IID) Monetary Analysis Contact Group (MACG) Payments & financial stability Payments & financial stability Insights into our work on financial stability and payments and market infrastructures Overview of payments and financial stability Quick links Digital euro Payments news & events Market contact groups TARGET professional use documents and links Latest Financial Stability Review 26 November 2025 Payments TARGET Services Shared features T2 Facts and figures Governance T2S Governance Facts and figures Pricing TIPS Cross-border payments Governance Facts and figures Onboarding ECMS Governance Pontes Governance TARGET professional use documents & links Shared features documents & links T2 documents & links T2S documents & links TIPS documents & links ECMS documents & links Pontes documents & links Tokenisation and DLT Appia Exploratory work Retail payments Retail payments strategy ECB as a catalyst SEPA Instant payments Market contact groups Collateral management harmonisation SCoRE Implementation FAQ AMI-SeCo Cyber resilience Financial market infrastructures TIBER-EU Euro Cyber Resilience Board Oversight Payment systems TARGET2-Securities Electronic payments Securities settlement systems and central counterparties Critical service providers Correspondent and custodian banks SecuRe Pay forum Reserve management services Key aspects Range of services Cash professionals Cash handling Authentication devices Recirculation of banknotes Common detector interface specifications Banknote manufacturer accreditation Financial stability Introduction to financial stability Macroprudential Measures Financial stability contact groups Statistics Statistics Access to all ECB statistics and background information Overview of ECB statistics Quick links Key figures ECB Data Portal Statistical releases PRESS RELEASE - ECB launches pilot project for research access to confidential statistical data 13 March 2025 Frequently accessed Euro exchange rates Key ECB interest rates Euro short-term rate (€STR) Interest rate benchmarks Working group on euro risk-free rates Inflation Euro area yield curves All statistics & background All key statistics All data services Data reporting & standards Governance and quality framework Co-operation and standards Banks’ data reporting AnaCredit AnaCredit Q&A Public consultations Banking industry dialogue on ESCB statistics and integrated reporting SDMX – statistical data exchange model INEXDA - granular data network The euro The euro All you need to know about our common currency Overview of the euro Quick links Cash professionals Banknote and coins statistics Euro exchange rates Redesign process of our future banknotes Digital euro What it is Digital euro and privacy How it works Why we need it Innovation platform Pilot Timeline and progress In-depth information Governance and stakeholder engagement Technical documents and research Scheme rulebook Frequently asked questions Cash The Eurosystem cash strategy The role of cash Issuance and circulation Access to and acceptance of cash Frequently asked questions Banknotes Future banknotes Redesign process Current banknotes Denominations Design elements Security features Anti-counterfeiting Banknote production and stocks Damaged and inked-stained banknotes Environment, health and safety Product environmental footprint Research and development Images and reproduction rules Information and training materials Coins €2 €1 50 cent 20 cent 10 cent 5 cent 2 cent 1 cent Common sides €2 commemorative coins Security features Collector coins Joining the euro area Bulgaria (2026) Croatia (2023) Lithuania (2015) Latvia (2014) Estonia (2011) Slovakia (2009) Cyprus (2008) Malta (2008) Slovenia (2007) Initial changeover (2002) Exchanging national cash Austria Belgium Bulgaria Croatia Cyprus Estonia Finland France Germany Greece Ireland Latvia Italy Lithuania Luxembourg Malta The Netherlands Portugal Slovakia Slovenia Spain Visually impaired people Research Research In-depth studies and expert analyses covering diverse topics and fields Overview of ECB research Quick links Conferences & seminars Opportunities for researchers Research Bulletin Economic research Research agenda Monetary policy, strategy and implementation Fiscal policy and governance within EMU International macro and finance Real sector and microeconomic analysis Forecasting and business cycle analysis Macro-finance, systemic risk and macroprudential policy Financial institutions, microprudential policy, financial markets and payments Opportunities for researchers Wim Duisenberg Fellowship Regular Research Visitors Lamfalussy Fellowship Summer Research Graduate Programme Student Research Traineeship Programme Legal Research Legal conferences and seminars Legal Research Programme Research papers Papers by authors ECB researchers Research networks News & publications News & Publications Browse all news & publications News Press releases Statistical releases Speeches Interviews The ECB Blog Podcasts & webcasts Payments news & events Press hub Publications Governing Council decisions Monetary policy decisions Other decisions Monetary policy accounts Economic Bulletin Articles Focus Monthly Bulletin Macroeconomic projections Annual reports & financial statements Annual Report Annual Accounts Eurosystem balance sheet Monetary policy operations Weekly financial statements Disaggregated data Financial stability publications Financial Stability Review Special features & boxes Macroprudential Bulletin Research publications Research Bulletin Working papers Discussion papers Occasional papers Legal working papers Statistics papers Other publications Letters to MEPs Convergence Report International Role of the Euro Events & calendars Monetary policy press conference Monetary policy statements Monetary policy statements at a glance Conferences & seminars Forum on Central Banking Young Economist Prize Past editions Civil society engagement Calendars Weekly schedule Meetings of the Governing Council and the General Council Statistical calendars Money, banking and financial markets Euro area economic and financial developments by institutional sector External transactions and positions Prices, output, demand and labour Government finance Supervisory and prudential statistics Eurosystem's tender operations Reserve maintenance period ECB banking supervision About us About us All about us Our leadership Executive Board Governing Council General Council Supervisory Board Our organisation ECB, ESCB and the Eurosystem ECB mission Eurosystem mission Strategic intents Organisational principles Our tasks and responsibilities Monetary policy Statistics Financial stability and macroprudential policy Our tasks Strategy Institutional framework Banknotes Payments & securities European relations European cooperation EMU economic governance International affairs International relations and analysis International central bank cooperation Foreign reserves and own funds Foreign exchange operations Organisation chart of the ECB Capital subscription Corporate governance Eurosystem financial literacy network Our values Independence Transparency Accountability Ethics – working with integrity Ethics Network of Multilateral Organizations (ENMO) Our history, arts and culture Our history 25 years of the ECB Economic and Monetary Union EU enlargement European Union Archives Committee of Governors European Monetary Cooperation Fund Delors Committee European Monetary Institute European Central Bank Arts and culture Our legal framework EUR-Lex - Frequently asked questions Institutional framework Climate change and the ECB Our climate and nature plan Climate-related financial disclosures Managing climate-related risks Supporting the green transition Fostering wider action Our approach Environmental protection Climate Insurance Protection Gap Sanctions imposed by the ECB Procurement Tenders Archive Electronic tendering system Access to documents Public Register of Documents Contacts Address ECB public holidays ECB & You ECB & You All about ECB & You Explainers Key things to know about the ECB ECB and beyond Our currency, the euro Making payments Monetary policy Unconventional monetary policy instruments Banking supervision Climate change and the ECB Test your knowledge Youth initiatives Girls' IT Bootcamp Financial literacy in Europe The gender gap in financial literacy Everyone needs stability ECB & You broadcasts ECB in Frankfurt Ask us Visit us Main building Careers Careers All about careers Vacancies Who we are About the ECB Meet our people Life in Frankfurt Why we value diversity Women@ECB Diversity networks What we offer Benefits & rewards Contract types Fixed-term Short-term ESCB/IO Other Traineeship Graduate programme ECB Scholarship for Women ECB Scholarship for Ukrainian graduates How you can join us How to apply How we hire You have been selected, what next? Fixed-term employee Short-term employee Trainee Cost-free secondee FAQs Search Menu ANYTIME PAST MONTH PAST YEAR Search Options Image Preview Sort by ANYTIME PAST MONTH PAST YEAR Suggestions Home Media Explainers Research & Publications Statistics Monetary Policy The €uro Payments & Markets Careers Suggestions Sort by Relevance Date Christine Lagarde The President of the European Central Bank SPEECH Back to basics in an uncertain environment Introductory speech by Christine Lagarde, President of the ECB, at the ECB Forum on Central Banking 2026 “Shaping Europe's future: innovation, growth and stability” in Sintra, Portugal Sintra, 29 June 2026 It is a pleasure to welcome you to the ECB Forum on Central Banking. Over the past 15 years, the euro area faced an environment of extraordinary pressures that called for unconventional responses. The sovereign debt crisis brought us towards the effective lower bound. The pandemic collapsed demand further. We responded with asset purchases and refinancing operations to support the economy, and new instruments to address fragmentation. Our toolbox expanded in other ways too: forward guidance with lift-off criteria, sequencing commitments, links between different policy instruments. When the environment reversed and Russia cut off our access to natural gas, we responded with a conventional instrument used in unconventional ways: the fastest tightening cycle in our history, raising rates in increments we had never used before. But in today’s environment, monetary policy now finds itself in a different position. We no longer need to reach for unconventional instruments. While we have them at hand, we can now focus on stabilising inflation with policy rates as our primary tool. We no longer need to act with the same force. We can make measured adjustments to rates, calibrated to the shocks we face. And we no longer need complex forms of forward guidance. Our decisions are data-dependent and taken meeting by meeting. Monetary policy has gone back to basics. [ 1 ] Has it? A return to basics does not mean a return to some idealised past, if there is such a thing in monetary policy. As Edmund Burke once wrote, “A state without the means of some change is without the means of its conservation.” [ 2 ] The same holds for monetary policy. Today’s world poses challenges that require us to apply those basics in new ways and to innovate where our existing frameworks fall short. Back to basics… Several factors have made the return to basics possible. The first is how the world has changed. Interest rates have moved away from the effective lower bound, driven in part by structural pressures that include rising defence spending. And the shocks of this era are more likely to fall on the supply side than the demand side. Because these negative supply shocks have tended to push prices upwards, interest rates have moved away from the effective lower bound. [ 3 ] But the shift also reflects, perhaps more fundamentally, the policy framework Europe has built in response to those crises. By making the economy more resilient to shocks, this framework has reduced the need for unconventional or forceful policy responses. The ECB’s own instruments have reduced fragmentation risks, including the Transmission Protection Instrument. These tools make it less likely that we observe unwarranted movements in sovereign spreads. They also mean that we can raise rates to address inflation without the concern that tightening itself becomes a source of financial stress. In addition, the strengthening of the European institutional architecture has weakened fragmentation by tackling the bank-sovereign nexus from both sides. European banking supervision and the European resolution framework have made the banking sector more resilient, so that shocks are less easily amplified by the banking system – though we need to remain mindful that financial stability challenges may be building in non-bank financial intermediation, where oversight has not kept pace. European fiscal frameworks have also developed considerably, from the European Stability Mechanism to Next Generation EU and other common borrowing instruments, weakening the nexus from the sovereign side. At the same time, there are reasons to believe that European policy responses are also reducing how far shocks pass through to the real economy. Our strategy assessment found that the anchoring of inflation expectations has moved closer to 2%, reflecting the ECB’s clear, symmetric target and its track record in fighting both too-low and too-high inflation. [ 4 ] That is critical for insulating the economy from undue second-round effects of imported energy shocks. The clean energy transition is also beginning to alter how those shocks are transmitted to the broader economy. In countries with higher shares of low-carbon electricity, like Portugal and Spain, wholesale electricity prices have increasingly decoupled from gas prices. This resilience has been clearly visible in recent years. The failure of Silicon Valley Bank did not destabilise euro area banks. The euro area has also weathered the largest US tariff increase in almost a century as well as what the International Energy Agency has called the largest oil supply disruption in history. The costs have been substantial, but the economy has not been derailed. Cyclical fluctuations have remained contained, even if some of these shocks do pose challenges for Europe’s long-term growth outlook. That resilience has allowed monetary policy to focus more squarely on its core job: stabilising prices through interest rates, without being constrained by fragmentation risks, banking sector vulnerabilities or the lower bound. …but not back to the past The world in which we apply these basics is fundamentally different from that which came before. We face a charged geopolitical environment in which the frequency of major shocks looks to be rising. And these shocks are also taking on new forms: market access, energy supplies and critical minerals are increasingly being weaponised. Shocks of this kind have two features that challenge our standard analytical frameworks. First, the economic effects of these shocks depend on strategic reactions that may not follow historical regularities. Last year’s imposition of higher US tariffs provides a vivid illustration. Most economic models predicted that the euro would depreciate against the US dollar, driven by expectations of higher US rates and a smaller US trade deficit, and that uncertainty would weigh heavily on investment. Many observers expected the EU to retaliate, raising import costs. But in practice, the euro appreciated sharply against the dollar, as investors re-evaluated America’s position in the global financial system. [ 5 ] The EU did not retaliate, prioritising its strategic relationship with the United States over its commercial interests. And European governments responded to the broader geopolitical shift with the largest increase in defence spending in decades, an endogenous response that partly offset the drag from trade. The second feature of these shocks is their capacity to escalate sharply, but also to swiftly unwind. The war in the Middle East is a case in point. The conflict has generated significant inflationary pressures. But at every stage, judgements about its length, depth and implications for the outlook have shifted. Cycles of escalation, negotiation, announced agreements and reversals have moved oil markets rapidly, sometimes in a matter of days. In March, oil prices surged to nearly USD 120 per barrel, and worst-case projections were far higher. Following last week’s interim peace agreement, prices have fallen back to around USD 73 per barrel, though the durability of this agreement is far from assured. Taken together, the picture I have described pushes monetary policy into new terrain. While we are more likely to face shocks that push inflation away from target, the resilience Europe has built means their effects on our economy are more contained. We may therefore more often find ourselves in an intermediate zone, between shocks we can look through and those we must react to forcefully. [ 6 ] At the same time, they are harder to read and more likely to change course quickly. So a proper calibration of our policy response is essential. We are meeting this challenge through innovation in two areas. Grounding our decisions in the right indicators The first is ensuring that we have indicators that are sufficiently concrete and responsive to support decision-making in this environment. One view holds that, given the features of today’s shocks, monetary policy should put a greater weight on inflation expectations. Since we cannot offset supply disruptions directly, our decisions should be calibrated on keeping expectations anchored. Inflation expectations are a key part of the data that we monitor, and will always remain so. Any signs of a de-anchoring in longer-term expectations will undoubtedly warrant a reaction. Faced with large and persistent shocks, it may also be appropriate to forcefully react before de-anchoring is visible. But when we find ourselves in the intermediate zone I have described, relying on expectations to calibrate policy has drawbacks. Stable longer-term expectations can potentially lead policymakers to delay responding to inflation that is already above target and being felt by households and firms, even when forecasts and incoming data would call for action. Conversely, if policymakers act to pre-empt a future de-anchoring, there is no reliable way to gauge how far rates need to be raised, or to know after the fact whether a pre-emptive response was necessary or excessive. But advances in the data we use, and in how we use them, now give us a sharper and more timely picture of what is happening in the economy, and a firmer basis on which to calibrate our decisions in the present environment. First, we have done considerable work at the ECB since 2022 to understand how concrete, real-time data map into medium-term inflation, particularly through developing our battery of underlying inflation indicators. Tools such as the persistent and common component of inflation have well-established leading indicator properties. Second, we have invested significantly in improving our projections. The projection errors during the 2022 inflation surge resulted in a switch to more granular forecasts for oil, gas and electricity, among other improvements. [ 7 ] Projection errors since the outbreak of the war in the Middle East have been very small. These projections give us a more complete medium-term picture, not only of the inflation outlook but of how it will respond to our policy changes. This helps to calibrate policy that is far better suited to the environment I have described. And the two reinforce each other: we can continually cross-check our forecasts against incoming data to verify whether they remain on track, so that we do not end up relying on forecasts that are out of date. This framework was central to our most recent monetary policy decision. Some have characterised our rate increase earlier this month as an “insurance hike”. That is not an accurate description. We faced an outlook of rising headline and core inflation, and a projection that saw inflation returning to 2% only in the last quarter of 2027, which was itself conditional on monetary policy adjusting. Our analysis showed that holding interest rates constant would have left inflation north of 2% in 2027 and 2028. This was a decision based on what we saw in front of us. And our ability to take it with confidence, in an environment of considerable uncertainty, is the product of years of investment in our data, our indicators and our projections. Building robustness But in an environment where shocks can change direction so quickly, it would not be wise to anchor our decisions too firmly to any single indicator or projection. The second innovation is in how we evaluate our decisions across different states of the world. Since our strategy assessment last year, scenario analysis has become a core part of how we take decisions under heightened uncertainty. [ 8 ] It allows us to test whether a policy decision holds across a range of plausible outcomes, and to identify in advance the conditions under which we would need to change course. This was particularly useful at our most recent meeting. In addition to the adverse and severe scenarios that we had already prepared in March, we included a milder scenario in which energy prices turn out lower than currently envisaged. [ 9 ] We added this scenario precisely to capture the possibility that geopolitical shocks can unwind faster than expected, as we have seen with the Strait of Hormuz. Our rate increase was justified under every scenario considered. It was, by design, a robust decision. And nothing we have observed since then has called this assessment into question. Energy futures prices remain within the range of the scenarios we have modelled. Publishing these scenarios also contributes to robustness in another way. It helps the public track when we may be moving from one scenario to another. But to anticipate how we will respond, the public needs to understand our reaction function. Here there is an important distinction between forward guidance, which we have set aside, and framework guidance. [ 10 ] Our rate decisions are guided by three criteria: the inflation outlook, underlying inflation dynamics, and the strength of monetary policy transmission. Because this reaction function is by now well understood by markets, they do not wait for us to act. They adjust financial conditions in response to new data on their own. Monetary policy begins to take effect before we have made a decision. And that buys us time to assess how a shock is developing before we commit to a course of action, which is highly valuable in conditions of high uncertainty. We have seen this play out over recent months. When the energy shock from the Middle East conflict began to feed through to the inflation outlook, market rates started tightening in March, well before our decision in June. That allowed us to gather more data and calibrate our response with greater confidence than if we had felt compelled to act immediately. In this case, the data came in broadly as expected and we raised interest rates. But we have also had situations where initial expectations were not validated. In the weeks after the US tariff announcement in April 2025, for example, markets priced in substantially lower rates, with a terminal rate as low as 1.5%. Our framework guidance gave us the space to wait and see how the shock played out, which was ultimately different from what most observers initially anticipated. The easing cycle ended at 2%. In times of uncertainty, forward guidance loses its value. But framework guidance becomes more valuable. When markets understand how we will respond across different states of the world, they can begin adjusting before we need to act. And that allows us to take more robust decisions. Conclusion Let me conclude. Over the past 15 years, an environment of extraordinary pressures has demanded unconventional responses. Today, the environment for monetary policy has changed. Shocks fall more often on the supply side, and Europe has built considerable resilience in response to those difficult years. This has created the space for monetary policy to go back to basics: stabilising inflation with policy rates as our primary tool, acting in a measured way, and taking decisions meeting by meeting. Yet the world we now face is no less demanding, and we must continue to change with it. The basics have not changed. But what it takes to apply them has changed. Thank you. In other respects, of course, the monetary policy environment has changed considerably. For instance, the Eurosystem’s balance sheet has grown more than fivefold since the end of 2006, reflecting the non-standard measures deployed during successive crises and a structural increase in demand for central bank reserves. It is now declining at a measured and predictable pace as the portfolios under the asset purchase programme and pandemic emergency purchase programme unwind. Burke, E. (1790), Reflections on The Revolution in France and on the Proceedings in Certain Societies in London Relative to that Event in a Letter Intended to have been sent to a Gentleman in Paris . For a more detailed discussion on why interest rates have moved away from the effective lower bound in recent years, see Workstream 1: Changing economic and inflation environment (2025), “ A strategic view on the economic and inflation environment in the euro area ”, Occasional Paper Series , No 371, ECB. ECB (2025), “ An overview of the ECB’s monetary policy strategy – 2025 ”; see also Workstream 2: Monetary Policy Tools, Strategy and Communication, “ Report on monetary policy tools, strategy and communication ”, Occasional Paper Series , No 372, ECB. As discussed in Lagarde, C. (2025), “ Trade wars and central banks: lessons from 2025 ”, keynote speech at the Bank of Finland’s 4th International Monetary Policy Conference, Helsinki, 30 September. Lagarde, C. (2026), “ Navigating energy shocks: risks and policy responses ”, keynote speech at “The ECB and Its Watchers” conference organised by the Institute for Monetary and Financial Stability at Goethe University Frankfurt, 25 March. Chahad, M. et al. (2022), “ What explains recent errors in the inflation projections of Eurosystem and ECB staff? ”, Economic Bulletin , Issue 3, ECB; Bobasu, A. and Pierluigi, B. (2026), “ Learning from misses: what forecast errors reveal about the nature of shocks ”, The ECB Blog , ECB, 27 February. See also Section 4 in Workstream 1: Changing economic and inflation environment (2025), “ A strategic view on the economic and inflation environment in the euro area ”, Occasional Paper Series , No 371. ECB (2025), “ An overview of the ECB’s monetary policy strategy – 2025 ”. ECB (2026), Eurosystem staff macroeconomic projections for the euro area, June 2026 . Lagarde, C. (2025), “ A robust strategy for a new era ”, speech at the 25th “ECB and Its Watchers” conference organised by the Institute for Monetary and Financial Stability at Goethe University in Frankfurt, Germany, 12 March. Related topics Key ECB interest rates Monetary policy Forward guidance Asset purchase programme (APP) Inflation Economic development Disclaimer Please note that related topic tags are currently available for selected content only. CONTACT European Central Bank Directorate General Communications Sonnemannstrasse 20 60314 Frankfurt am Main, Germany +49 69 1344 7455 media@ecb.europa.eu Reproduction is permitted provided that the source is acknowledged. Media contacts Are you happy with this page? Yes No What made you unhappy? Page not working Information not useful Design not attractive Something else Thank you for letting us know! Useful links About us Work with us Explainers Press photos Contacts Where to find us Using our site Disclaimer & Copyright Technical updates Responsible disclosure Corporate Policies Data Protection Privacy statement for the website Cookies policy Accessibility statement Language policy Site directory Copyright 2026, European Central Bank Follow us Our website uses cookies We use functional cookies to store user preferences; analytics cookies to improve website performance; third-party cookies set by third-party services integrated into the website. You have the choice to accept or reject them. For more information or to review your preference on the cookies and server logs we use, we invite you to: Read our privacy statement Learn more about how we use cookies I understand and I accept the use of cookies I do not accept the use of cookies Thank you! Thank you! We have updated our privacy policy We are always working to improve this website for our users. To do this, we use the anonymous data provided by cookies. See what has changed in our privacy policy I understand and I accept the use of cookies I do not accept the use of cookies Your cookie preference has expired We are always working to improve this website for our users. To do this, we use the anonymous data provided by cookies. Learn more about how we use cookies I understand and I accept the use of cookies I do not accept the use of cookies This feature requires cookies. Modify

Nøglefraser.

Fuld tekst.