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FRANKFURT, July 12 – The European Central Bank will change its guidance on the next policy steps at its next meeting to reflect its new strategy and show it is serious about reviving inflation, ECB President Christine Lagarde said in an interview aired on Monday.
Announced last week, the ECB's new strategy allows it to tolerate inflation higher than its 2% goal when rates are near rock bottom, such as now.
FORGET INFLATION – DEFLATION COULD REAR ITS UGLY HEAD SOON
This is meant to reassure investors that policy won't be tightened prematurely and boost their expectations about future price growth, which has lagged below the ECB's target for most of the past decade.
"Given the persistence that we need to demonstrate to deliver on our commitment, forward guidance will certaintly be revisited," Lagarde told Bloomberg TV.