European Central Bank (ECB) President Christine Lagarde will present the results of the institution’s strategy review today, where she is likely to announce the first changes to inflation targets in nearly two decades.
The ECB says the results of the survey will be announced at 1 noon Frankfurt time, which will be followed by a briefing from President Lagarde.
The survey was first conducted in January last year, but was interrupted by the Covid-19 pandemic crisis that hit Europe. It was then resumed last September.
The first ECB review since 2003 has been one of Christine Lagarde’s priorities since she took over from Mario Draghi in late 2019, and this new strategy will mark the biggest transformation in the institution.
In the move, the bank will likely set an inflation target at 2%, setting aside the current formula of ‘below, but almost 2%’, which has had the effect that it is more concerned about price increases above the target than below it.
The target may also be expressed symmetrically. But after nearly a decade of overcoming it, investors will be watching to see if the ECB will be willing to let inflation soar following low price growth.
They will also see if the ECB will follow the United States in setting an average inflation target over a period of time to cover lost price growth.
During the European session, the euro traded slightly higher around 1.18000 against the US dollar.
