‘I cannot remain neutral’: Lagarde finally explains her early ECB exit
Lagarde says she is leaving the ECB early because she can no longer stay neutral. She also revealed the ECB debated a hike and hinted at a December move.
Christine Lagarde, the ECB president, is stepping down early from her post on February 7, 2027. She explained that the neutrality expected of central bankers was no longer acceptable to her, as she feels compelled to express the truth. During her final press conference, Lagarde revealed that the ECB had considered raising interest rates, but ultimately decided to hold them steady.
She attributed the debate to two factors: rising energy prices and higher borrowing costs for governments and businesses. Lagarde emphasized that the ECB is prepared to act if market turmoil threatens the effectiveness of its policies. When discussing the rising French bond yields, Lagarde highlighted the global nature of the issue and the challenges faced by countries with high debt levels.
She reaffirmed the ECB's readiness to take action if necessary, but noted there is room for improvement before a potential debt crisis emerges. Lagarde stated that her mandate will officially end in October 2027, but she will leave in February to allow for better articulation of her views.
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